[Music] We just came to a brand new new build Community and as you can see here that Is chained up you guys this is chained [Music] Up and here we are at the gigafactory in Austin Texas we just got breaking news Today that Tesla is planning to lay off 10% of its Workforce [Music] Welcome back to real estate mindset and Today we have another Extravaganza boots On the ground eyes from the sky Metro Report video and today we're coming to The epicenter you guys which is Austin Texas and again you guys we're going to Do way more than covering just new Construction we're going to take a look At certain things that are going on Right now with existing homes we're Going to take a look at Commercial Real Estate you guys we're going to go Downtown Austin I really hope hope you Guys enjoy this and not only that I also Have Melody Wright with us Today Welcome to Austin everybody here We are at the UT campus in front of the Very famous tower behind us happy to be Co-hosting this trip has already been Amazing and it's going to continue to be Amazing for all the things that we're Going to find here what do we think We're going to find in Austin it's Really ground zero for the overbuilding
I was here back in February of 23 and Even then it was it was bonkers Uh but it it has just continued to be so So I think we're just going to see more Evidence of what we've seen before as Well as there's a ton of commercial 5 Million uh square feet under Construction right now and we just got Here but all we can see are the cranes The existing Home Market in Austin is Absolutely a dumpster fire now according To redin guys existing homes again not New homes we'll get to that in a minute But existing homes year-over-year Austin Is down 3.1% but if we go all the way back to The peak which is May of 2022 you guys We're down 21.7% which Equals 145,000 back in May of 2022 existing Homes in Austin actually peaked at 669 th000 so my heart goes out to all Those people understand that these Existing home subdivisions that are next To these new home subdivisions appear to Be dropping faster in price but also Guys when it comes to homelessness and Crimes it appears that neighborhoods are Declining in value for multiple reasons But I want to say this okay for Austin To be down 145,000 from Peak before a Recession has started before Unemployment has even started is
Astonishing to me but either way guys Definitely remember to do subdivision Analysis if you want to know whether or Not you're going to get a great deal in Austin a big part of the story that we Didn't talk about in San Antonio Texas Of course are the short-term rentals and Austin is Ground Zero over 15,41 19 Short Tim rentals right now listed in Austin and what are they often they came Into older neighborhoods like the one We're standing in here today homes that Were built over a hundred years ago and They flipped those homes I've seen Lots In these neighborhoods go for $2 million They flip them they turn them into Short-term rentals taking away housing Stock from this area are pocket listings Real well certainly they are in Austin As you can see we're standing in fun of One right now it's a private listing the Reason why we wanted to stop real quick First of all we're right outside Downtown Austin but Austin has one of The highest ratios of off-market Listings the problem with that guys is It runs rampant with fraud potentially Money Laing and quite frankly it's just Additional data that we don't have in The Austin area and so again you guys This is all over the place here we are With our friend Austin in Austin Texas In front of a existing home for salees Austin tell us a little bit about this
Neighborhood well um my grandfather Built it in 73 I think it was 37,000 That he built it for uh he passed away In 2021 we sold the house uh for 6997 June of 2022 was the year that we Sold it a couple bought it uh they had Another house that they were going to Cash flow cuz they had issu selling it I Don't think that they're able to cash Flow it now because the rental rates Have dropped so much so not sure what This situation is but the house is Listed for substantially less than uh What we listed it for I think it's at Like 614 now tell us a little bit about This neighborhood you know something Travis and I are doing a little bit Differently on this trip you know our Last trips we went to New build but That's only part of the story right this This is an old neighborhood like you Said your grandfather built it in 1973 Right um so tell us a little bit about The way this neighborhood Grew uh well in the 70s there was a lot Of um organic job growth mostly Government cuz the city was growing um Now it's been more Tech obviously Neighborhood was developed in the early '70s um and it's grown all the way up to This day there's been additions in the Back um in the 90s and this way there Was additions in uh after the 2010s so
It's an Interesting um it's an interesting Metric location wise uh because it's It's very organic old school Austin hair You're outside of the city limits but You do still pay city taxes because you Get City Water schools stuff like that And and were you saying that uh the People that got here before 2018 those Were the ones that really were able to Grow their Equity here yeah so you know You I think Austin's kind of a unique Case I think we're kind of a precursor To what we'll see naturally just uh Naturally just like we were um you know Before all the equity boom happened Nationwide it happened here first so but Yes if if if you were in Pre 2018 uh You've got probably at Peak over 100% Equity in your house almost depending on Depending on the area depending on the Area of course but here yeah it was Close to 100% you know what I see when We came in in the neighborhood uh I saw Some disturbing signs that I've seen in Other places in Austin which is some Vacant properties some in the middle of Being flipped you know something I had Heard from some of my followers here is That people would buy that second Property that investment property Sometimes they wave that inspection Though and so now they need to rehab it But they don't have the funds to do that
And they can't necessarily sell it Because they're going to lose what they Paid for it ab and so tell us a little I Mean this neighborhood is absolutely Beautiful these trees are gorgeous I Mean I you know I'm kind of Blown Away What's changing in Austin Austin let's See well uh a lot of the Native Businesses are gone we've lost a lot of Local businesses here um we have had a Lot of big corporate and Tech businesses Come in so I think that this area has a Lot of room for organic job growth we Have There's jobs here here we are at The gigafactory in Austin Texas we just Got breaking news today that Tesla is Planning to lay off 10% of its Workforce Globally and now we know that Tesla has Actually just become Austin's number one Employer and if you look around us guys This facility is massive and although These layoffs will be across the world We'll have a huge impact here and Employment is sound but what you need to Live in Austin is a very high paying job And so this is as we know as we've Talked about over and over we lost 1.8 Million full-time jobs we've added Part-time jobs so though although people Talk about the strong labor market what You and I know is that it's absolutely Weak underneath and this announcement Today is going to be highly impactful to This community so it's just really of a
Question of do people want to pay the Prices for the houses and I think that You know we've been finding out pretty Recently that either a the you know the Mortgage or the rental rate that they're Going to get is not palpable to their DTI and income or B they just don't want The houses right so I mean I don't I I Don't really know the direction things Are going to go I think areas like this Um probably will take the blows a little Bit less uh but some of some of the more Um internal and uh centralized Neighborhoods and developments in Austin I think will probably get hit a little Bit harder well you know we just saw Somebody that shook your hand knew you From the neighborhood talked about your Grandfather you're obviously well Established you said to me before we Started there's you can't get more Austin than me Austin right yeah I grew Up you grew up here grew up here um born And raised left when in about two was it 20 1 join the Marines um I left for a Long time I didn't come back for about 12 years I came back once for leave but Everything had changed and I got back it Was insane I wish I would have bought a House in 2018 but um you know it it it it changed A lot there's a lot of individuals here From California um our city council's Changed a lot we turn over city managers
More than they do people that flip Burgers at at McDonald's in Austin so um There's a lot of internal conflict with The citizens um between individuals that Are from here and individuals that are Not in the media people try to make it Out like it is such a political thing You know personally I think that that That narrative it just kind of got Amplified in reality it's about Speculating around certain ideas like That yes what I see is just so much Rampant speculation in Austin so you Know something that we're going to be Asking some people here has has Austin Lost its weird I I just think it's lost Some of its original Nostalgia there are Pockets of it whether it be through um Like residential Aura where you live you Know certain neighborhoods and there are Certain certain parts like the green Belt in Town Lake that are still nice But with the homeless problem we've had That the the city's poured I think Almost $200 million into and um if you Look around whenever we have events here Kota Moto GP South by Southwest ACL uh There's numerous Financial events here Um the city is always magically Perfectly clean right before they come And they've ended up while trying to Enforce camping Bands then re then Revising the ban then enforcing it again They moved a lot of the homeless
Individuals into the green belt here so A lot of the individuals that moved here From Cali that was part of the Nostalgia Of Austin was the outdoor um the green Belts the camping the lakes and that Stuff is becoming a little bit more uh Stressful you know to enjoy has Austin Lost his weird no I don't think so I Think you can do whatever you want in Austin and no one will judge you ever Really yeah what's some of the cool Things you like to do in Austin study um yeah great watch some Fun shows just study explore the city Explore the city we we love downtown and Whatnot what's one of your favorite Spots downtown six Street six Street Yeah awesome that's about it though the Coffee shops here are great that's one Of my favorite things but that's not Weird so I don't know has Austin lost Its weird I think Austin's always been a Weird place compared to a lot of Texas Towns especially lately I think we're Kind of over a hump of uh population Boom and then kind of tech coming in I Think now we're really in a in a good Space to maybe build out a weird again So I think maybe some of the spirits Lost but we're on the way back oh that's Excellent news so any any good example You want to share with us where you feel Like maybe the soul of Austin is coming Back I really like live music there's
Been some really cool shows that I've Been able to see uh stuff at South by Southwest that a lot of artists I think Are taking notice and like to come Through and uh and and build out that Community and I think the community and Culture is already really awesome for Music it's just a great place to That's amazing thank you so much for Your time yeah are you going to stay in Austin absolutely not I'm out I unless The if the prices go down another 20% Like they have maybe I'll stick around I Was like but uh I mean where we don't Know you know I guess it depends on what Happens with rates um if there's a more Palpable rate I'm not I'm not expecting Two or 3% again but um you know if There's something more palpable like Around five we might we might stay but It's it's it's going to be difficult for Us to stay like we we'll we'll see what Happens new home data now so as far as Austin guys it's very difficult to kind Of isolate Austin as far as how much Prices are down for new homes but what We can tell you is we went to several New home build communities around Austin And we sell many many homes I'll throw Up a couple demos on the screen here but Homes that have 50,000 60 $70,000 in Price cuts and remember you guys the new Home communities that are basically Building on top of each other a lot of
Times you're going to get the best deal There but a word of caution you don't Want to be stuck in a new homebuild Community That's not completely developed and what I mean is is if you're going to buy a New home understand guys we're headed Into recession and if you're going to Buy a new home you're going to want to Purchase a new home with a community That's almost finished okay if you're One of the first owners in a brand new Subdivision you're the most at risk of Negative price decline affecting you and Also guys you know when we went around This trip actually you know what let me Show you what we found I didn't really Want to Vlog style any of this but we Just came to a brand new new build Community and as you can see here that Is chained up you guys this is chained Up okay now how would you like to be a Person that purchased a property here in The subdivision and then you find out The entire subdivision is now being shut Down you guys there are holes inside Roofs there's you know trash flying Around every everything is overgrown so Where's the demand you know we hear all Of these narratives but this what I'm About to show you guys and I'm going to Pan around we'll throw up the Drone this Is is exactly what I've been warning you About especially if you're purchasing
New homes and communities that are only Partially developed because developers Will run out of money you guys and they Will bail out on you so again take a Look at this this is freaking insane Guys look at this okay every one of These houses look at that Everyone abandoned everyone abandoned Look at this every single house here is Abandoned this gate locked up abs Absolutely shocking guys and these are What would you say you know like I don't Know looks like they got Plumbing in Looks like they got Electric in and one Of the big problems that we see with This type of vacancy is in an increased Arson and increased fires recently I Believe there's been a probably I think There's been an increase of something Like 2 to 300% in arson and fires Because the homeless come here and Either it's you know obviously insurance Fraud are homeless just are neglectful They accidentally light something on Fire probably doing drugs and it burns Down and these are places where that Will actually become rampant I mean you Guys you know I'm getting Goosebumps Right now because this is the very first Okay so this is our first time where We've shown you a community that is now Abandoned yes that was absolutely Abandoned how crazy is that we told you So and also guys on top of that remember
Sold signs we found nine sold signs in The abandoned community so again proof Is in the pudding they play tricks if if You're going to go buy new remember Bring a realtor or someone that is great At these types of things okay again Preferably a realtor that you trust now On top of that guys as far as total Inventory is actually exceeding existing Total inventory for new homes 10,146 the total amount of new home Communities is 460 so again lots of Opportunity here in Austin you guys the Fact that people are saying that there's A lack of inventory not here in Austin And real quick guys as far as Foreclosures we have 363 foreclosures Here in Austin which again if there's so Much demand why are there still Foreclosures on the market now on top of That guys for sale by owners total for Sale by owners is 253 now real quick I forgot to say this As far as existing homes existing homes Actually matches new homes as far as Inventory sitting at about 10% now as Far as months of Supply guys we're under 5 months of Supply in Austin that's okay We're sitting at about 4 and 1/2 months Of Supply according to red fin if you go To redin Data Center that's exactly what It's going to say but the thing is guys Understand this there's completely two Different worlds okay there's existing
Homes and there's new homes there's pros And cons of each wanted to bring you a Little local color here in Austin one of My favorite movies days and Confused the Scene was filmed here where they break Into the football stadium and smoke a Little pot um guys people and Austin are Going to be very Dazed and Confused soon We just left an abandoned new build the Developer walked away I mean almost Finished absolutely insane we're seeing So much on this trip and unfortunately I Think it's visions of what's to come so Whenever we're referring to new Austin Versus old Austin this is new Austin a lot of single family Residential areas we're in Governor's Hill right now this is a very um very Expensive part of Austin it's very old School lots of roots lots of um Native Austin type homes and structures but uh This is what you're going to see around Here you're going to see a lot of like REM mods that need a lot of city permits And a lot of multif family housing that Used to be zoned as single family so This is pretty much what you're getting In in and around Austin especially in The central area right now this is also Leading to a lot of turmoil when it Comes to um voters and citizens you know A lot of city council uh Authority Planning oversight monetary Responsibility uh it's having a lot of
Investor influence pushed on it versus Um just basic citizens with single Family homes so you're see a lot of a Lot of battling a lot of development Internally in Austin and in Travis County and a lot of the developments That are more single family homes are Being pushed further out to the suburbs Where was more organic job growth like Around Tesla and the gigafactory Taylor Hudo places like that so it's it's a Pretty concurrent issue you'll see it Out search versus Central lots of multif Family going into where it used to be It's Bonkers and here we are in downtown Texas where this recent high-rise had a Tree topping uh Ceremony this is one of Many new Office Buildings going up in Austin you see cranes all over the city And this building specifically is going To be a combination of office space Retail and multif Family Apartments so We have 22% vacancy right now in Austin With over 5 million square fet in Development for commercial real real Estate moving to the multif family side We know that we've got record multif Family under construction the highest Since the 70s and here in Austin they've Got on gang busters we've seen Apartments everywhere luxury apartments Surrounding the downtown but what's the Occupancy rate right now 89.5% and what has has rent growth done
Is down 7% year-over-year so trouble Ahead for all of this uh commercial real Estate in development as well as all This multif family demographics in Austin were a big part of this story Everybody talked about how many people Were moving to Austin and that was Absolutely accurate what I wondered last Year was is that permanent moving or was That people moving down for construction And other jobs like that but what we can See now is that that growth has slowed Um according to the census proper which Is about a year delayed you have about a 1% growth in the city of Austin about Around a 3% growth outside of Austin as Well but USPS puts out information every Year and they detailed that Austin is in The top five for net migration out so so We believe based on talking to folks Here that that population boom has Slowed we also know that last quarter we Saw the slowest relocation growth in the History of the study so the demographics That were such a huge part of this story During Co with that slowing down what You have here is people that have gotten Way over their skis good morning Everybody welcome back we're here in Dallas uh we want to do our closing from Yesterday we got in really late last Night saw some very interesting things Um but we'll talk about that a little Later um Travis why don't you let us
Know what do you think is it cheaper to Buy or rent in Austin well I'll tell you Guys now that I'm in Dallas I'm starting To realize how great Austin actually is Now first what I want to do before I Personally tell you whether or or not I Think you should buy a rent I first want To give you the statistics on the Average rent and also the average home Price and what the difference in those Two is now starting with rent guys now Obviously the first thing I want to Point out is 55% of total housing units Are being rented right now so in other Words if you're a local here in Austin We need you to step up be patient and Eventually become a homeowner start Taking back what is yours as a local and Austin that's a big shout out to you Brother my heart sinks for you now on Top of that guys understand average rent For all units is about $1,800 a month There's about 5,400 total units in the Austin area now that is down a whopping 3% year-over-year so rent is going down On top of that that guys we were able to Find multiple incentives to rent now When we look at a three bedroom sfr the Rent for that is slightly over $2500 now the interesting thing guys is That's actually down over $200 year-over-year so roughly Three-bedroom house okay now we're going To take a look at the mortgage payment
But a three-bedroom house to rent Roughly $2,500 now when we look at the Mediumsized house the medium priced House here in Austin the total sales Price right now you guys is $454,000 now that's down basically. 2% Year-over-year now when I take a 5% down Payment conventional mortgage and I use A 1.4% tax rate using a 6.5% interest Rate the mortgage payment for the same House you would rent would be Approximately $36.94 plus 5% down which would total $22,700 so the difference guys in Austin Basically around average obviously is a Difference of $1,193 per month so that's obviously Around $14,000 a year plus $22,000 out Of your pocket so honestly guys here's The thing the Gap here in Austin is Massive I honestly I think overall you Guys especially with the incentives Especially that we have declining rent I Think right now is actually a great time To rent and I will also say this if You're local in Austin feel grateful Because Austin is ground zero of any Real estate crash and any correction is Going to happen first in Austin so the Locals should be helpful but I will also Warn you guys look at Austin Austin is Well qualified he's out there with Purchasing power and he's saying no Buyers local specifically local buyers
Like Austin are the very buyers that are Going to help us bring back balance to The market because they qualify right Now and they're saying no and they're Saying no because what's happening is a Lack of fun mentals and a lack of Sustainability and people like Austin Will not put their finances their Family's finances at risk to fall into That fumo trap and go buy an overpriced House so what I want to say again I want To end here locals take back your Housing market you will have the first Opportunity in Austin and you will lead The nation what happens next in Austin And how can the locals and consumers Prepare to get ahead so what happens Next you have to understand what's Happening right now and what's happening Right now guys we're standing in front Of the permitting office in Dallas which Has been shut down because they Themselves did not file their own Permits that final occupancy permit and So this is a prime example of we're not Getting the story out there that is why Travis and I are out here because there It's not necessarily that they're lying To us it's just that our systems have Become so inept they can't even file Their own permits guys so we have to Know what's happening now what's Happening now is narrative is driving The housing market today we got some
News on new construction being those Permits down you know I think things are Starting to turn but you have to know Where you are so you can think about Where you're going to go and what I can Tell you is that out of the rubble of What this is going to be because people We have overbuilt like and and I Understand you haven't seen it but I Encourage you take a left turn instead Of a right turn in your own City and and Look at some of this stuff so we've Overbuilt so we have to we have to Understand where we are and rebuild and The way that we're going to do that is Just like you were saying Austin who we Met great guy in Austin Texas he is Saying no you have to say no now to wait For that opportunity and then you have To get involved locally because we have To take our cities back you know we all Have agency that we don't even know that We have just like Austin by saying no so And to take our city back we have to get Involved locally we we maybe have to do Things that make us uncomfortable like Go talk to new people instead of just Sitting at our computer but that's how We're going to take back this nation It's with people taking just a little Extra effort every day getting outside Of their comfort zone turning left Instead of right and looking out there To see what's really going on because
The people in the financial media have No interest in telling you the truth Very powerful words obviously guys Change starts with you and just do it we Can all make excuses and other than that Guys don't forget go to Melody wrs Substack get more and more insights if You want to support us obviously these Metro report videos are tough on us they Cost a lot of money go to her substack And check it out and other than that Guys shoot us some comments below let us Know what you thought about this video And how it's resonating with you and Other than that if you're out there Investing in real estate you guys Already know we wish you luck and we Hope you win Yet in the long run the evil influence Of the inflation financially as well as Morally penetrated even to me Berlin had Become the center of international Profiteers and noisy new Rich for a few Dollars they could buy the whole town Drinks and women horses and houses Virtue and vice and they made free use Of these possibilities really I think You can do whatever you want and no one Will judge you ever really yeah [Music]
