The new home collapse continues and they Don't want you to know as they continue To cover up information and don't forget You guys on this channel we use multiple Multiple data providers to triangulate Exactly what's going on in the housing Market under the hood and also don't Forget there's two different worlds in The housing market right now there's Existing homes and there's new homes and Today we're going to go over new homes And we're going to look at Fred economic Data and I'm also going to take you guys Underneath the hood and I'm going to Access MLS to show you guys what's Happening in a subdivision that we have Been covering on this channel called Harrington trails that was one of the First subdivisions I went to and I Showed you guys the Census Data the MLS Data and then I drove around that Neighborhood and I counted 1 2 3 4 5 to Show you guys that they have two to Three times more homes than what's Actually listed on MLS now fast forward To today that same subdivision has an Over a abundance of new homes but the Problem is some of those recent owners Are now trying to sell and they're Quickly and unfortunately finding out That in order for them to sell they have To beat the builders welcome back to Real estate mindset today's video is Going to be absolutely Bonkers and when
I'm done with this I'm going to go back Into work on the free free okay free Courses that we're making right now to Help you guys fight potentially whether It's right now or in the future over Assessment property tax in my own local Housing market the builders are offering 0% rates again in my housing market Builders are offering 0% rates and They're still cutting the prices on the Properties by over $100,000 this video is going to be a Good one when I'm going over this data I'm also going to be looking at the Trends for new construction to see if Any of these Trends are recessionary Indicators and I think you're actually Going to be really surprised what you See here so let's start with permits now First of all you guys this came out August 23rd permits to build is at 1.4 Million units right now over the last 10 Years that's a very healthy amount but Notice as well you guys the recent trend Is going down now this is what's Interesting when we look at when Recessions Occurred typically not all of the time But typically what you'll see is is You'll see permits start going down and Then we go into recession and then when We end recession permits go up and you Can see that with those red arrows those Red arrows means that permits are going
Down into the recession and the Green Arrow represents that after the Recession permits actually Skyrocket Upward now the interesting thing is is Again take a look at the trajectory Right now the trajectory right now is Going down which would potentially mean We're either in recession or it's Possible recession is right around the Corner let's move on as far as starts We're sitting at 1.23 million ion starts so again over The last 10 years that's a very healthy Range to be in but when we look at the Trajectory of the current trend of these Starts you can see that it is clearly Going down and when we go back into the 1960s you guys can actually see not Every time so this is not a perfect Indicator but often you're going to Start seeing starts go down and then we Go into recession so the fact that Starts are going down right now is a Potential potential recessionary Indicator and just like permits after The recession this stuff like skyrockets Upward so it's a roller coaster ride With these Builders now this next data Set you guys is absolutely crazy now When I talked to Logan and I appreciated The point he made on our channel here Which was that one of the reasons why We've stayed out of recession is because There's so much construction going on
For building and it's actually very Interesting because this data that I'm About to show you actually supports his Hypothesis now when we look at total Units under construction never been this High but I want you guys to know this Includes both sfrs and five units or More which is both important to the Housing market and the rental market but Right now we're at 1.53 million units under construction so There's a lot of jobs right there but Again you guys look at the trajectory Now this may be the most important Recessionary indicator of all the data Sets I'm about to show you because Normally again going back to the 1970s when this goes down when Construction goes down it leads us right Into recession pretty much every single Time now first of all look to the right The trajectory is going down look at the GFC the trajectory is going down right Into the recession the only time it Didn't really happen was the dotom Bubble but look at the 1990s again it Goes down into recession you see that in The 70s and you see that in the 80 so It's very interesting right I'm not Saying that this is a perfect indicator But I am saying it's an additional Indicator that spells trouble under the Hood don't forget this they are 100% Under reporting this data when we
Separate out sfrs take a look at where We're at with the five units or more and Again this is good because we need rent To go down more obviously because it's Sky High right now but take a look you Guys again the trajectory is going Downward and like the other data set That we went over it goes down into Recession we're sitting at 870,000 Units that's a ton of units under Construction depending on how quickly That inventory hits the market and Depending how concentrated it is because Usually it's very concentrated it's not Spread out through the nation you will See rents softening but it depends again On the market so pay attention to yours Now also interesting when we just look At single family residences we're at 653,000 In under construction that's pretty Decent now again pointing out the Trajectory you see that downward Trajectory when it goes down it often Leads into recession you see that during The GFC again you don't really see that In the dotc bubble you kind of have These little decreases right here in the Middle there you see that two decreases But we didn't go into recession they Weren't big decreases but every other Decrease going back to 1970s Everyone led to recession isn't that
Very interesting guys but regardless They are still out there building like Crazy one thing that new construction Has had over existing homes other than The crazy incentives is Supply and Inventory and generally when Supply is Over 6 months that's when a lot of pre Downward pressure put on prices these Builders have to give you insane Incentives just to get you to agree to Purchase these houses and the reason That is they pulled so much demand for It and the little bit of demand that's Left they can't afford the housing Market because it's so out of whack but Regardless you guys when we look at Supply we been well over 6 months for Over 2 years now sitting at 7.5 months Now that trajectory has gone down Recently probably a result of the Slowing down of new home construction And I'm going to say guys we don't Necessarily want that to slow down we Want it to continue to increase and we Want the quality of construction to be Good now regardless this is very Interesting unlike the other data that We went over this actually skyrockets Into recession take a look you guys you Guys can see again going back to the GFC To the 1990s '70s and 80s even in the Mid-60s this goes up in fact it Skyrockets when we start recession so Again if you go to where we're at right
Now you can see that this is actually it Started to go up but recently it's Started to go back down which would Which would kind of demonstrate that We're not quite just again just looking At this data set we're not quite in Recession yet but the good thing is guys Is the inventory is sitting 7.5 months Is a lot of inventory before we look at Prices understand how you really find a Great deal you got to go hyper local Into the subdivision and the problem With new homes guys is a lot of times And I'll show you that here in a minute They don't even report the sales data so It's very it's a lot more difficult to Do that in new homes because they have a Monopoly on the transaction and they are Under regulated so there is a massive Lack of transparency and you see it as a Realtor when you access MLS data and They hide it they don't even report it And also you guys remember what we're About to review the median it's not true Raw median they have turned median into A Proprietary index and how they've done That is they've changed the pricing Buckets to hide the price declin so Don't worry after we're done going over This I'm going to show you actual price Decline because again unfortunately and This is sad and I don't like it we can't Trust this data because they revise it
To manipulate the narrative it is up Over the last two months and it's gone Up a decent amount you guys can see that On the right there so according to the New way they're calculating median again This is the new way I think theyve been Calculating this for what four months They went back three years to change all Of this uh that's why I said BS right There but regardless we're sitting at 429 800 and don't forget this you guys The amount of incentives that they're Offering according to Lenard at least in Texas is over 50,00 That's just rate buy down incentives They're not reporting that seller Concessions as is required they're not Doing that in order to keep these prices Stable they commit fraud they commit Fraud if they know they're supposed to Do seller concessions and they're not to Keep the value supported I mean maybe That's not fraud but it certainly feels Like it here's my local map of Lenard And you guys can see there are two Properties that have over $100,000 in price Cuts but don't forget You guys you still have to do a sub Vision analysis because some of those Price Cuts aren't true price cuts the Only way to really understand whether or Not what you see on the screen right There is a true price cut is to do your Analysis it's very very simple math you
Guys all you have to do is use Simple Math but I thought it was interesting Again just lenar there's multiple home Builders in my area but just lenar is Reporting and I can guarantee you guys There's probably double the amount of Not triple but they're saying they have About 252 homes 40 different communities And they are slashing the prices on Their houses like crazy and I can Confirm that most of those are real Price cuts by doing what guys Subdivision analysis and reviewing comps Lenar is offering 0% interest rates because they can't get Enough people there's not enough demand To go buy those houses so they have to Offer ridiculously below Market interest Rates which again why is there no seller Concessions but take a look at this you Guys amazing promotional Loan program The first year is a zero again a 0.99% second year is 1.99 third year is 2.99 and it maxes out This sucker maxes out at a fixed rate of 3.99% and I highlighted on the bottom There that is through lenar mortgage so If you're in real estate and you Understand RBA the real estate Settlement procedure act can you explain To me how's that not steering lenar is Saying we will give you a 0% rate If you go if and I'm going to steer you Now if you go to them if you don't go to
Them we're not going to give you a 0% Rate do y'all see the problem here and My question is and I really don't Understand this why is nobody why isn't The cfpb the FTC why is nobody enforcing The law we're going to do is a little Bit of a minic case study on a Subdivision that I've been tracking Again called Harrington Trails now first Of all let me show you what this looks Like on MLS and you guys can see again I Have drawn around the subdivision Because remember you got to go Subdivision it's too noisy you have to Filter down to subdivision right and Then after you filter down your Subdivision add filters to the Comparable so you can narrow in on Wedge Cash flow and things like that don't get Overwhelmed by looking at every single Comp regardless you guys that's the Subdivision I've been tracking that's a Subdivision that I found two to three Times more homes than when was actually Listed on MLS but right now on MLS you Guys can see on the upper left it is Saying as far as active listings that Are available through MLS only is 68 and Again you guys I could probably go there And count three times that amount but This is what I want to show you of those 68 active listings roughly about 16 of Those listings as you can see here are From existing homeowners that want to
Sell their house have they owned their House for 5 years 7 years 10 years like I've been saying that we probably should Do no they haven't they've only owned Their house for one two three years and You guys here's the thing and I'm about To show you this there's 16 existing Home sales those people that are selling Those existing homes have to now compete With the Builder and the Builder is Offering a new house at a super low Interest rate with massive price Cuts so It's impossible for a lot of these People to compete but again you guys you See here and I want you guys to pay Attention I've started the top and I've Started the bottom to show you they're Trying to get $124 to $17 $71 a square Foot but take a look at this when I Categorize all 68 listings by the price Per square foot you guys can see that The first three here are brand new homes Selling for 115 115 and then 120 I put An arrow next to an old comparable I've Highlighted $124 a square foot but if You go up two listings to where I put an Arrow next to New that's almost the same House it's a brand new house probably Comes with insane ridiculous buying Incentives and it's being sold for $122.1 a square foot so let me ask you Why would anyone want to buy a used House at a higher interest rate probably No incentives with a higher payment it
Doesn't make sense it's used right I Mean it doesn't make sense but it gets Even worse when I go in and I start Accessing some of these existing homes To see what condition they're in and Guys the way I do that is I go to Archive so if you have access to MLS go To the archive and you can see the History of that listing to figure out What's going on now the first thing that I noticed is exactly what I've been Telling you guys they're not reporting a Lot a ton of sales data on MLS you see Right here that this home it's showing That the first time it was listed April 30th of 2024 but that's impossible Because there's someone living in it Right now and again what I'm showing you Here is even though they have a monopoly Over this system even though they're Giving even though they're getting Taxpayer and government incentives They're not being honest with the public They're not being honest with the agents They're not being honest with MLS this Property does not allow me to see what It was originally purchased for now when I go to this next listing take a look at This you guys this person purchased this Property two years ago for 247,000 two years ago I'm sorry guys Less than two years ago now they tried To list it one year later at 255,000 they couldn't sell it they took
It off the market decided to list it Again at $10,000 higher I don't think They understand how this works remember They're competing against the Builder But what I really want you to understand Is if they bought it for 247,000 look at The top left at 8% the cost to sell that House 6% Realtors 2% for taxes insurance Would be $21,200 what you see here is someone That purchased in 2022 and even though If they sold it for 265 which they Haven't by the way they're still upside Down they can't afford the fees to sell Their house and so again let me ask you If it's between this house and a brand New house why would I want a used house With a higher payment and a higher price With probably no incentives because Again they cannot afford to give Incentives because all of their Equity Is going to the fees to the agents so They're stuck and I can almost guarantee You they probably didn't plan on leaving In a year what do you guys think another Thing that's crazy is I found out that More than likely the Builder turned a Tremendous amount of those properties And Harrington Trails into rentals and The crazy thing about this is the Rentals are not working and those same People that converted these houses and Harrington trails to rentals are now Trying to sell the rentals because
They're not working probably because Property tax take a look you guys now Originally this was rented okay for TW Almost $2,300 Back in June 1st of 2023 but this Property was listed for sale less than One year later so it wasn't even a full One-year term and this person already Wants to sell their house for 299,000 in other words you guys and Again this is my market every Market is Different you can't use my strategies in My market in a place like Anaheim California every Market is unique but The math you guys is the same and what We see here is we see the math is not Working as it pertains to single family Residential rentals in other words be Very extremely cautious and what I do When I'm looking at real estate is I use The math if we use the math we are in a Much safer situation but I hope you guys Understood what I showed you I showed You a few red flags when it comes to Purchasing new construction and again we Didn't even go over quality of Construction we didn't even go over the Arbitration agreements we didn't go over A lot of things but what we did go over Is what it looks like when people's Plans fail what happens is is they try To sell their house but they can't Because the Builder will undercut them Every single time other than that guys I
Hope you guys learned something here Comment below let me know what else you Guys want to learn let me know what you Found helpful in this video don't forget To have a free home buying course I will Have that property tax course up for Free very very soon my thank you to you And if you guys are out there investing In real estate you guys already know I Wish you luck and I hope you win
