Isn't what she said the warnings the Insights that she's giving you better Than Glenn Kelman welcome back to real estate Mindset today's going to be an Absolutely Bonkers video we're going to Talk about what Glenn kelman has Recently said the CEO of Redfin and how This whole lag effects is playing out in The real estate market as you guys may Know we already have a type of recession In the real estate market because sales And transactions are back to the 1990s Same with purchase applications for for Financing so there's a lot going on and I figured I would take you guys to one Of the offices I work out of and right Now you guys I'm trying to be really Quiet because I'm in a library but Anyways this is where I work I hope you Guys like it and if you can okay for Going out of the studio going in the Field like the video and that's all I Will say and I hope you guys enjoy now As always the data will be linked in my Description if you guys want to come Back and read this article for yourself When I'm not shouting at you so if you Want some peace and quiet Link in the Description now we're going to review a Fortune article the name of this article Is the economy might be booming but Housing is in a recession top real Estate CEO says he's never seen anything
Like this in the last 20 years and that Would be accurate you guys because again Sales and transactions are worse right Now than during the GFC and if you're wondering why are Prices going up then well first of all It depends on the market let's be honest If you want to know if you're getting a Good deal you got to go hyper local Subdivision analysis but the point that I'm trying to make is most of the Appreciation in median sales price that You guys are seeing on a macro level is Partially the result of more million Dooll houses selling in fact if you look At the price tiers for what's selling Right now anything over about 800,000 it Depends on the market though but about Anything over 800,000 we see a growth Year-over-year so obviously that's going To have an impact on the macro median Sales price data now before I begin take A look behind me is this office not like Super cool not sure what to do with that But I do like working here now I'm going To start by reading a little bit of this Article guys now the article starts Glenn kilman is the chief executive of Redin a self-described technology Powered real estate company a modern way To buy and sell homes he's been at the Helm for almost 20 years or two decades And doesn't seem to have lost his Zeal Not during the GFC not now he calls
Himself the luckiest person in the world Except recently because we've seen what Their stock is doing which is it's in The gutter this article goes on it can't Be easy redin stock reached a high more Than $95 per share but this was during The pandemic and it's corresponding Housing boom but it's trended downward Ever since landing at around only $5.50 It's been a rough ride and think about That so from $95 to $5.50 I could tell You if you're a shareholder and you Purchased at $95 and it's now $5 you Feel like you've lost all of your money By investing in red fin I mean it is What it is guys this article goes on It's been a rough ride Revenue dropped Last year and agents were cut it goes Beyond red fin all of the housing World Suffered as a Federal Reserve raised Interest rates but I'll argue guys the Reason why the housing Market's Suffering is because the runup Overwhelming unsustainable runup in both Price and unaffordability losing 40% of Our agents is a tragedy I feel Personally responsible for it I was the One who signed their offer letters in Spirit if not in fact and I failed to Grow the business to the extent that we Could keep them all busy it's just hard When the number of homes sold in the United States drops from 6 million to 4 Million so in other words guys
Understand that before the Slowdown we Were at about 6 million and before the Lockdown in the five so it going from Five to six million so transactions to 4 Million sold transactions and 2024 may Be worse because of the interest rates It's killing people people don't have 30 To 40% of profit like they can take a Loss on so business being down about 40% You guys it's killing people and that's A fact the company that I worked for Amcap mortgage and I was there I'm sorry Amcap Home Loans I can never keep up but I was working for amcap home loans for Over 10 years and you guys they are no Longer in business companies can't Handle this for much longer scene number Three I hope you guys can appreciate how Important it is to me to give you guys Quality content I cannot stand being Locked down in my studio you guys so Here's another saying but I'm going to Go back into the article here's where we Left off last year existing home sales Fell to their lowest point in almost 30 Years again you guys in almost 30 years Meaning sales right now are lower than The GFC they're lower than the great Financial crisis this goes on the Housing market froze and it's only just Begun to thaw but has it Ian why are They saying I mean sales are worse so How how's it Glenn how is it thaw sales Are worse how's it thought anyways let's
Keep going mortgage rates were the Highest they've been in more than 20 Years and they've come down since but Are still high compared to what they Were during the pandemic in the past Week or so mortgage rates surged again Because of the inflation and the Overwhelming runaway inflation you guys They will not cut rates unless they need To stimulate the economy and I know People in real estate are like yeah we Need stimulation here we need Stimulation here but the prices haven't Corrected yet so you guys got to be This goes on reaching their highest Level in months 7.5% home prices are high the cost of Buying a home has gone up again and Prices haven't gone down not enough Anyways so the FED keeps trying to tame Inflation with rates increases but at Least one sector is untameable and that Is housing and I'll tell you guys Housing market right now has been Incredibly resilient from a price Decline standpoint okay so again from a Price decline standpoint and honestly Think about how bad that is that means That everything that's going on that we See that we are upset about as Americans And consumers everything almost Everything is built on the backs of Homeowners and their houses so if house Value goes if the housing market goes
It's fair to say that everything else Will follow it's anxiety induced he said Housing is a basic need and would be Buyers who held out last year are tired Of waiting Millennials who delayed Starting a family putting plans can only Wait for so long so start your family Renting you guys I feel like I'm a good Husband I feel like I'm a good father And I rent just because you rent doesn't Mean you can't be good at those things Now kelman said he's never seen anything Like this calling it the worst situation For the housing market housing is in This recession and the rest of the Economy is booming but again deficit Spending if the economy was booming then Why would there be so much deficit Spending I mean it's exceeding the GFC And in were not even in recession They're spending more money in deficit Now out of recession than they did During recession in the GFC by a lot you Guys a lot this goes on I was the CEO During the great financial crisis he Continued sales volume went down but Prices did too one problem fixed another Kelman said usually when sales decline Prices drop too and then sales increase Later that's the cycle he said houses Become affordable again and sales pick Up because of it this situation is very Different and honestly guys I'm going to Tell you right now the big difference
Here is is there's so much speculation It's even worse in the GFC and some People will argue that the primary Reason for the GFC collapse was because Of investor speculation and all of the Investors liquidating their houses at Basically the same time it wasn't Foreclosures some of this is just this Artifact of 30-year mortgages he said Everything the Federal Reserve is doing Has no real effect on homeowners what a Apart from keeping them where they are It actually has the perverse effect of Keeping home prices high and that's why I said guys and it just you know it just Depends we still need more data but you Know there's a certain probability that When if interest rates go down two to 300 bases points that inventory will Explode the market and all the home Sellers that were in the sideline will Come back to the market if we have an Inventory explosion these prices are Dead in the water person I've ever Helped and represented under my name That knew me from YouTube so huge deal And I'm going to include in this video Three questions that I'm going to ask Them so I'm going to do an interview ask Them why they didn't wait number two do Realtors make too much money and number Three what red flags can they point out To Consumers being that they are Purchasing at the end of April of 2024
So sit tight for that towards the end of This video let's go back into the Article so he goes on he doesn't know That mortgage rates will go up Significantly through the end of this Year they could even come down down Depending on inflation and I'll change That guys to depending on economic Turmoil obviously he thinks sales will Improve and they've already been better Than he's expected that's because people Need homes it's not a fad to own a house Actually when you look at the definition Of fear of missing out it is actually a Little bit of a fad when it the prices Run up like they have recently so I Wouldn't necessarily agree with him on That one uh and also what's interesting Is and I'll show you at the end of this Guys is actually sells are actually down Not up so eh sounds a little flip-floppy But this continues and there's a deep Seated humanid need to own a home where You're going to raise your family I hate How people always put it back like if You want to be a good father or husband You got to own a house that's far far From the truth I could tell you guys That still the problem goes beyond the Latest spell of unaffordability and has More to do with building homes for the Longest time housing was getting very Expensive but money was getting cheaper Kilman said and a product of the
Pandemic made it so people could move Anywhere they want to I.E remote work Californians became Texans and floridans But all the buffers are gone the people Who were going to move already have and Money isn't cheap anymore the only way To solve the problem is by Building Homes all right just about packed up you Guys are going to love these people for Me closing to today is bittersweet Because I'm going to miss them these are Some extremely good people very well Qualified very fair and very strong at Knowing what they wanted so you know Bittersweet I'mma pack it up right now You guys but let me uh read a little bit More of this article before I do that Guys let me go back to what Glenn kilman Was saying let me throw up the mortgage Application demand so as you can see Here the composite index is basically You know in the gutter if you look at How low it is it's it's literally it's Almost un imaginable when it comes to Mortgages it's worse than the GFC we Have to go back all the way to 1995 to Have comparable years of such low demand And then when we throw up the other one Guys which is existing home sales you Can also see here again in comparison The lows of the GFC and before that 1995 So it's an absolute dumpster fire in the Housing market very you know just Typical foolish optimism oh better than
Expected blah blah blah blah blah uh but Again we're at 1990 levels things are Absolutely horrible back into the Article the basis of the American dream Was that there was more land here than Was in Europe he said so he going back To Europe okay Glenn nice to see your Living in present times am I right guys And for the longest time the government Was very aggressive working with Builders to create more housing but Eventually that changed with that Gilman Called well-meaning laws to protect the Environment and give people more control Over what kind of housing was built in Their neighborhoods that backfired and It became much harder to build anything But I mean in Texas I see it everywhere I know Texas is a lot looser the left as Well as the right have really struggled To solve the affordability crisis and Again don't forget this guys as they Continue to mess things up even more Until we have a collapse don't forget Part of the equation to affordable Housing is you okay not everyone but There's certain levels to this but you Right rebud getting are you rebud Getting have you fixed your credit is Your purchasing power strong all right So when it comes to zoning restrictions I believe he's saying California is Probably Ground Zero for years its Housing crisis worsened because of
Policy failures and Unfettered local control initiatives Were drawn up to change local Regulations surrounding L use and they Failed time and time again but finally They didn't kilman said it's an Encourage ing sign and finally people Are talking about housing at all levels Of government because something needs to Be done Biden's basic problem with Millennials is how optimistic can he be About the economy from your parents Basement kman said so if you're in your Parents basement you know depending on How you're living in their basement that Could be a good thing I mean Jeff M Someone in our community live I don't Know if it was in his parents basement Or his grandparents basement but he Lived and he saved money and and then by Before he was 30 he paid all cash for a House so it is about the person as well Okay guys we just got here I'm super Excited to ask these questions really Want you to pay attention to what They're saying again my Market's way Different here in Texas we have a whole Bunch of overbuilding they are so well Qualified and so you know realistic with Their expectations so I hope that shines In this interview now I wanted to finish The article out and here's the thing you Guys I don't agree with a lot of what This is saying but let's read a little
Bit of this if we were completely Undressed in public we would have Nothing to fear okay apart from the Deteriorating affordability there's Another thing that's rocked the housing Market the national association's $418 Million settlement but I'm going to tell You guys right now I don't think that's Going to do a lot for prices of anything It's going to hurt buyers even more but There are a few things in here that I Think you know kman makes a good point And this is what he says that I like He's basically saying redin would be More successful if consumers were more Value-driven so maybe moving forward They will but this is you know this is What he says I think we could have grown More if consumers were more value driven No I'm sorry if consumers were not even More he's saying were which means most Of them were not the more clearly buyers Understand the value of what we offer The more sales will get well what value Do you offer you're basically telling People if they rent right now they're Going to rent forever or they're going To be living in their mom's basement I Mean it's super belittling she's Louise Right but now let me read this last Paragraph as well I think this is a good Summary even so kelman said he doesn't Know that the housing market will be Affected following the settlement if
Anything the change in commission seems To benefit sellers exactly it won't make Housing more affordable he's not Endorsing the settlement by any means Because for one it still needs to be Approved exactly and there's no way to Know for sure how everything will shake Out of course redin is facing its own Commission losses let's not forget get That he wouldn't comment on whether he's All worried instead he said the company Was in a good position and that its sole Existence for 18 years has been to give People a better deal and guys that's Exactly what they're going to need to do If they're going to make it through this Housing market consumers need help from Agents to drive the prices of houses Down so what little transactions are Left I beg you if you're a realtor do Not fall in and let your clients fall Into to the premise of fear missing out You'll see with these clients but I will Walk away easily walk away from someone If I feel like they're purchasing real Estate based on emotion and not Fundamentals and not doing things like Subdivision review I'm sitting here with Jasmine right before closing on her Brand new house Jasmine is the very First client that I've ever personally Represented uh that watches me on YouTube and first Jasmine are you Excited about closing on your house
Today yes we are very excited we have Been waiting for this moment for a long Time okay okay so uh you know Jasmine Has agreed to allow me to interview her But before I do I want to explain to People the viewers are probably like oh My gosh if I'm purchasing in Houston Will Travis represent me I want you guys To assume as viewers right now that I Will not that I am not going to Represent you we're out here driving Prices down on houses so I want to set This up first understand that she's a Well-qualified buyer number one she Already has great spending habits and Has maintained great spending habits Number two she's not her and her family Are not going broke purchasing a house And they have the proper expectations so Understand that y'all my first question Jasmine is obviously you know you've Watched me on YouTube you know I've been A little bit concerned shown some Recessionary indicators potential Unemployment why did you guys decide and Granted we in Houston guys so this is Not Maryland okay this is Houston why Did you guys decide to purchase now and Not continue to wait well we actually When um move out of the country back in 2013 and then we came back to the state Back in uh 2017 so we have actually been Waiting since 2017 we've been wanting to Buy when we came back but as when we
Sold um in 2013 and when we buy in 2017 the price is almost doubled so We've been waiting and waiting and Waiting until like we're like you know What you know we've been wai waiting for A long time we are in a good financial Position and we need to just feels like It's a need um the right timing for us To purchase at this point okay and even Though that she said that I still try to Convince them to rent you know that you Still decided I mean they wanted to move On with their life uh now the next thing Jasmine I told the viewers were out There trying to you know push prices Down I waved first of all I'm going tell The viewers the commission on this was $18,000 we were able to wave $6,000 of That commission and have the new home Builder match that actually exceed the $6,000 so we got them another $155,000 Off bringing me to my next thing okay do Realtors and first of all guys despite What she says I'm going to say heck yeah They make too much money so despite what She says right now she's going to be a Little merciful but our Realtors making Too much money keeping in mind the Commission was supposed to be $188,000 well for me you know coming From the buyers perspective Ive right of Course we want to pay as little as Possible and you know as little that we Can get away but I have to kind of keep
That in mind that Realtor that's their Um profession right so it's really not To up like I felt like it's not up to me To say whether they make too much or not Because if that's their full-time job They have to make a living and the Example is uh back in 2019 2020 we've Been looking and we've been actually the Realtor at that time have been showing Us a lot of homes but we didn't end up Buying during that time frame so and Then we have to push aside you know wait For a few more years and so that Realtor Spent a bunch of time with us but not Ended up getting anything from us right So we kind of have to keep that in mind As well that you know they have to feed Their family like they need to make a Living they also need to pay bills There's a lot of factor that goes in um But you know but now that I'm also Thinking you know maybe for the higher Price point uh homes maybe there could Be a cap as far as you know like if People are selling a dollar a million Dollar home right so you know the Commission it's quite a bit you know and Some of it might be able to go back to The seller or um whatever it is the the To to even out the cost a bit so maybe a $10,000 cap you know I personally I Think that's fair $10,000 is a lot of Money would you agree I would say maybe 10 to 15 you know so if you know they
Close I mean it really depends on the Realtor right you know CU for you you've Been amazing because not only is uh have You been our realtor but you also with Your uh loan officer background you kind Of help us with the loan process as well You've been educating me you've been uh Telling us what to watch out for you Know you you are teaching us you know The process what to ask and stuff like That so for you you actually did two Jobs for the price of One I still disagree I still think I Made too much money you guys and I tell Them all the time I made too much money Even on this TR even though we wave $6,000 I still think it was too much I Mean I was depressed for 48 hours she'll Tell you I didn't talk to him for 48 Hours after the contract was executed Because I'm going to miss you guys Because we walked away man we walked Away we're out there being mean and I'm Going to miss that you know moving on to The last question Jasmine now obviously Price was a huge thing for us um part of The things that I was trying to do to Help you was help you and and your Husband Tai learn how to analyze a Subdivision review comps hoping that she Would eventually become a realtor and Then you know be one of the good guys Right or gals so one of the big things For me as your agent was again comps
Doing subdivision analysis but my Question is is can you tell the viewers Maybe some red flags that you know Noticed as a consumer going through this Process and I want you guys to Understand this is the end of April of 2024 she is an active buyer I tried as Best I could to guard her and her family You know from the process but again Every process is different what can you Tell the viewers as far as what you Learned about this current process um I I have um I was thinking that you know There are quite a few points that I Think we should um pay attention to one Is finding a good realtor a good heart Good hearted realtor like Travis um he Is very kind he's very patient he is not Commission focused so you know the whole Process actually before we get into Contract of this home we were actually In a contract with the older home and um Towards the end because one of the Inspection came back and we uh the buyer And the sellers we couldn't uh agree a Point on the repairs so we have to walk Away and one of the first thing that Travis said was um don't worry about me We can continue to look I'll be here for You so there is no pressure there was no Pressure whatsoever from Travis so that Was amazing so we were actually free to Make our decisions you know between my Husband and I and so we have to talk it
Out loud and you know waiting the pros And cons uh before we actually decided To walk away so finding a good realtor It's really key right so they don't Pressure you into any um major decisions Uh two I would say that uh for us it's Like figuring out what we want in the Home right so for us it's we actually Before I even started officially started Working with Travis we actually started Um going out driving around to different Open houses different uh we actually Picked three locations to look at that We are uh considering so we were looking At a bunch of open houses different Location and then the more we look the More actually the more clarity that we Have um not only the location but also The lighting the number of rooms you Know that we we uh need for our family Um the maybe perhaps the school District uh and then also the Neighborhood and the pricing for sure That we have to kind of get some clarity On in terms of what we can live with and What are some of the things that it's Non-negotiable so number two is knowing What you want uh number three is uh Reading all the documents right so when When every time we get into a contract So far we got into two recently with Travis we read every single page and Every single word on the documents so That we know what we're getting
Ourselves into I remember when we first Purchase our home like I don't know like A decade and a half ago uh back in 2008 I I was so intimidated by all the paper All the legal languages and stuff like That and we have no idea what we're Signing and so that was a very Intimidating process and it's almost Making me feel very disempowered because I have to rely on somebody to explain to Me what they are what I'm signing and Stuff like that and but this time we Were able to sit down and you know spend An hour or two just read through all the Documents together my husband and I and So one of the things that I remember is We come to a point uh on one of the page Of the contract is talking about the Hydrostatic Testing and we have no clue whatsoever What that is and it kind of my husband Was kind of interested in was like what Is that like he was asking and so we Started looking Googling that and it was Like oh yeah we wanted to do that kind Of testing and Travis didn't know Because I think we asked Travis we asked Um different I think even the sellers Agent for our previous contract and even Our current um Builder rep nobody knows What Hydro hydrostatic testing is and Everybody was just kind of scared by This terminology because they think it's A very dangerous testing but uh the
Whole point I'm talking about this is Because the reason Um uh because we did we went into the Hydrostatic testing on the older home The 30 your home we actually found uh There is a root intrusion in one of the Pipes and that is the reason we ended up Backing out of the contract because the Selling wasn't doesn't seem like they Were willing to repair that as well as The tree that the root is from the Neighbor's tree so that is a big red Flag for me and then that was the main One of the main reason we got out the Contract Is because we ultimately don't have any Control on the roots because that tree Is not even in our backyard so um to Reiterate I would say read the documents Every single page every single word just So that you are empowered and you know What you're signing okay and then if I Can you know tell them about well first Of all so we switch to new if you guys Are going to buy 1990 houses hopefully You have it is really extra important Not to go broke because you're going to Have a lot stuff to repair so one of the Things that I wanted to tell them is is When they decided to purchase new we Probably reviewed what 40 pages of Inspections would you say probably like 40 pages of inspections so what I Learned too is you know a lot of these
Builders when offering new houses have Existing inspections that you can review So we actually reviewed the framing the Foundation uh so so many inspection Reports but if you can tell the viewers You know what it felt like learning that Even though we talked about this for Like 45 days before we closed because They're buying new you guys they did not Escrow or collect enough property taxes Probably by I would estimate $8,000 Again they're collecting $8,000 like Less then and also what that does is Their payment now appears to be $700 Roughly lower so this time next year Their payment is going to go up roughly $700 they're going to owe $8,000 more in Property taxes that's not being covered By their escrow because they're BR new How do that make you feel that's tough Because uh I Know Travis you kind of Wanted to push for the lender and the Title company to make sure they escrow Enough funds I would say that it is very Important because I just heard a story From you that you know saying that they Owe uh somebody bought a home recently Now they owe $6,000 in taxes uh for us I Think because of uh your constant Reminder and then we this is our uh Second purchase of uh a property so we Know what kind of what we are getting Ourselves into financially and so we are Okay even though we try for them to uh
Es going um sufficient uh money for the Taxes but they ended up not because they Are based on the tax served uh from last Year which is more or less a a lot just A dirt lot right so it wasn't value as Much compared to now uh but we are PR Mentally prepared to set aside money um To uh fund the uh property tax uh I Would say at the end of the year or Early next year some somewhere around There so we are okay we are financially Prepared we are mentally prepared and we Are not going to be get caught off guard And and you know not knowing what to do Okay awesome you guys uh one more time You know shoot them in congratulations They know what they're doing they have Again the right expectations I really Appreciate your time we're going to head To closing right now and other than that Guys I want to say a few things uh I Think also finding the um appropriate Inspector the reputable inspectors right Uh for old homes new homes I think it's Equally important uh we did a home Inspection we did a mole inspection we Also did a uh termite inspection for the Older home uh we didn't do the termite For this new home cuz I don't think you Know that was an issue uh we also did The hydrostatic testing so we did all of Uh three out the four even for the new Homes and I think one of the things is When you doing the inspection we talked
About this Travis before that um we Spent about $2,000 on the previous home That we wanted we really wanted to Purchase but ended up we have to walk Away so it was not the easiest thing to Walk away but then again it was I think Ultimately it was a good decision to Walk away because otherwise we wouldn't Have landed this uh new home actually um Everybody is happied about so finding Good reputable inspectors that's not Associate with the seller all the agents I think it's very important they have to Be like really neutral and like they They know what they're doing and give You the best um um analysis so that you Know as the buyer you make your your Best decision whether to go forward or Not okay guys well we're going to head To closing now and seriously comment Below isn't what she said the warnings The insights that she's giving you Better than Glenn kelman isn't it better I mean seriously the wisdom the insights This is going on boots on the ground Right now stop listening to Glenn kelman You have no idea what I'm talking about I made an entire video before this one Um but you know it's just been it's been An honor when we close Homestead okay Property tax homestead we want to do That right away and other than that guys I'm going to get us out of here okay Anything else you want to say I would
Say get educated you know get educated Travis has been uh really valuable in Terms of even educating on the loan Process you know that which we have no Clue right we just rely on the loan Officers we just rely on the uh the Sales rep you know so but there's a lot Of the things that you should just not Be afraid to ask Empower yourself Because even what we found out is um There's a lot of the uh inspection like You mention from the Builder that Builder had to pass every stage of the Constructions that we found out that Nobody ever asked for like we were the First One so it was it was really good that They were really patient to sit down With us to go through all 40 I don't Know 50 pages of the um the report Because it now gave us a lot of uh Confidence in the home that we are you Know purchasing and that it's not going To fall apart in 10 years so just keep Asking you know do due diligence I think That's what Travis like about us that we Are doing always doing the due diligence And don't be afraid just don't be afraid To ask right So I think that's you know that's what I Wanted to say just get educated on the Process too golden you guys again way More important in my opinion than Glenn Kilman CEO of redin uh other than that
Guys we're going to get out of here if You're out there investing in real Estate we I think I speaking for Jasmine We wish you luck and we hope you win Good luck
