[Music] I'm so in love with you welcome back to Real estate mindset today's video is Going to be absolutely Bonkers now the Data is in an inventory is absolutely Exploding despite normal seasonal Declining Trends so normally this time Of year inventory goes straight down and That's not what's happening right now so What we're going to do today guys is We're going to dig into redfin's weekly Housing market update and towards the End of this video I'm gonna dig into Everything inventory and I'm gonna show You guys all of the new data surrounding Us home Inventory but before we do that We're first going to jump into the Article I'm going to go over the summary I'm going to go over the leading Indicators I'll go over the Year-over-year price decline list we'll Visualize some data I'll do the peak Versus current comparison we'll really Dig into inventory and then we'll end With today's conclusion now guys please Do me a favor understand and that I must Say this I'm not a financial advisor Even if I want to be even though my bio Is as a realtor loan officer and Instructor in real estate in Texas so I Know a little bit about real estate plus I had a foreclosure bankruptcy and repo And I'm renting right now looking for a Home of my dreams at a deal that's
Absolutely Irresistible so you guys do me a favor Again like the video subscribe if you Haven't already shoot me a comment below But either way let's jump into the Article now the name of the article is Housing market update home prices post Small increase as mortgage rate drop Attracts buyers so we'll jump right into This summary an increase in home Searches and tours at the end of 2022 is Starting to translate into purchases as Mortgage rates fall mortgage Applications are up 25 and the slowdown In pending sales is easing so mortgage Applications has gone up pretty Substantially but year over year y'all It is still way down the median U.S home Price increased 0.9 percent from a year Earlier to 350 250 dollars during the Four weeks ending January 15th the Biggest increase in a month and the Thing is guys you may remember last Week's update video but the median sales Price then was 350 000 right so 350 000 and went up two Hundred fifty dollars so the median Sales price went up 250 that's it let's Continue prices remain elevated because Buyer activity has started to pick up as Mortgage rates decline due to the Slowing inflation average mortgage rates Dropped to 6.15 percent during the week Ending January 19th their lowest level
Since September pending home sales fell 29 year over year a significant decline But the first sub 30 drop in three Months mortgage purchase applications Rose to 25 percent from a week before During the week ending January 13th a Jump that's likely to lead to more Pending sales in the coming months as Demand inches back some homeowners are Less reluctant to sell new listings of Homes for sale fell 20 percent year over Year during the four weeks ending January 15th but that's the smallest Decline in two months so homes for sale Is down 20 percent why would I title This video inventory is exploding if Sales are down 20 percent the reason I'm Doing that and I'm titling it is because Inventory is going up despite what all Of these numbers are saying and you guys Understand that I constantly tell you we Need to look at months of inventory Because months of inventory also takes Into account demand and when less people Are selling less inventory is needed to Sustain the housing market either way Guys let's jump into the next part of The video so here's this week's leading Indicators and one point I want to make Is Supply is going up faster than demand Is going up all right so again Supply is Going up faster which is good then Demand is going up so I just wanted to Point that out here's some of the
Leading indicators right now for the Week ending January 19th a 30-year Mortgage rates dropped to 6.15 now pay Attention to this the daily average was 6.04 percent on January 18th so what I'm Going to do is when we do our Peak Versus current comparison I'm going to Use this rate right here today's rate of 6.04 percent and I'll use the median Sales price of 350 000 250 but I wanted To point out that interest rates are Headed towards a downward trajectory I Have been saying that I personally Believe as long as they stay in the five Percents we'll be okay there's so many Other factors that are going on right Now in the housing market that we don't Necessarily need higher rates mortgage Purchase applications during the week Ending January 13th jumped one week in One week over week J jump 25 percent From a week earlier seasonally adjusted Purchase applications were down however 35 percent from a year earlier so yes we Are having an influx but it's still way Bad it's still way down Google searches For homes for sale was up a whopping 30 Percent from the November low during the Week ending January 14th but again down 26 percent from a year earlier now look At the bottom here you guys I don't know What's going on with Redfin it seems Like their data is conflicting but they Just dropped the median sales price
Again right here so what we just read It's 350 350 000 250 but right here it Says the median home sales price was 350 000 up 0.9 percent year over year the Biggest gain in a month Oh so I think someone forgot I think They're taking the old data let me know What you guys think but you know I see All this optimism all this optimism and They can't even get the median home Sales price right I mean we just read Part of the article that contradicted This pretty funny you guys but now let's Go into year over year price decline List here's our year over year price Decline list now this represents 36 of The top U.S metros on year over year Price decline list last week it was 40 So it shrunk from 40 to 36 percent but Really you guys need to understand the Astonishing thing about this list is in Order to make this list these cities and Metro areas had to have lost all of the Equity gain in 2022 plus more right so Really really remarkable how much Equity Has actually gone down in some of these Metro areas starting with prices fell 10.1 percent in San Francisco plus Whatever it you know plus whatever ever It went up in 2022 think about that 6.7 Percent in San Jose Austin 4.3 Detroit 3.8 Seattle 3-7 Phoenix Sac Town San Diego Anaheim Chicago Los Angeles Oakland and Boston and goes on Riverside
Portland New York Norwalk and Las Vegas Now there's obviously many Metro areas That were on this list that are no Longer on this list but you know really Really look at this list and really take A look at how bad California is and why Is California always the state that you Know that leads the housing market crash Pretty pretty remarkable and that's why I think that Florida is going to go Through a similar fate because Florida Is obviously super duper unaffordable I Think the reasons why we haven't seen Florida match a lot of the Metro areas In California is I believe there's a lot More like retirement money out there Like second homes where people maybe you Know a lot more 6 successful and they Are speculating they're buying homes and They're not doing a lot with them Because Florida is like a vacation State I mean almost every area in Florida is Oceanfront right at least at least on The outsides right so you know I believe That's why we're not seeing it yet in Florida but that's going to change this Year we already know that because it Always does and again even if history Doesn't repeat itself it does Rhyme Let's get back into the article we're Going to start with median sales price As we start visualizing some of this Data now remember 2023 is this orange Line and again you guys I just really
Want to paint the picture here as soon As we get out of February I believe That's when the year-over-year price Declines are going to be Super shocking to mainstream media and Super shocking to any current homeowners That are not paying attention right Because look at how close it is already I mean it's pretty flatlined right here It's pretty flat lined but again you Know right after this peak right here in February you know in 2022 home prices Went up significantly I don't think that Happens this year I think February That's you know that's when that fear of Missing out is really going to shift on Over to the sellers once we start like Having radical national average Year-over-year price to climb but you Guys can see it's it's not going Anywhere and this is you know this is Astonishing because the rates have been Going down since November and yet it Doesn't appear to have affected median Sales price and probably the reason is Is because things are still so Unaffordable now okay some point here's Home buyer mortgage payments okay so Again I really want to point out look at Where the orange line is and this is why I'm telling people hold up don't buy Right now we have a lot more room to go Down because unaffordability is still Here it needs to be corrected and if you
Look at this orange line it's well above The red the blue and the gray which Represents that you know it even with The lower rates right now way too high Way too unaffordable still not properly Reset and if you guys really think about It when we started January in 2022 Mortgage payments were around Seventeen Hundred dollars around Seventeen hundred Dollars fast forward to today it's now 2262 dollars so that's the point I'm Really trying to make to you guys is I Understand rates are going down some Buyers are coming back into the market But there are still so many people Priced out they're priced out and not Only are people starting to get priced Out they're losing all of their savings And an overwhelming amount of debt let's Move on to the next thing listings that Had price drops this is very remarkable I wanted to point out that this is Skyrocketing upward part so we're now at 4.3 percent of homes that have listing Price drops this is especially good Because this is one of the leading Indicators to see what effect the Interest rates are having immediately on The housing market so the fact that it's Skyrocketing up even though rates are Almost in the five percent again listen Even though the rates are almost in the Five percents again and probably are for Some people listings still have to drop
Their prices in order to sell don't Understand what I'm saying here they Still as you can see this is double this Is more than double where we're at where We're normally at seasonally in order For home sellers to sell their house They must drop the price in almost every Metro area now this is a pretty cool Chart this is 21 of homes sold above Final list price and what we want to see Here is we want to see this go down the More that this goes down basically means That sellers are not selling their homes At their asking price right so only 21 Of homes sold above the listing price Which is a drastic change from 2021 and 2022. so in 2022 that was basically Double so 40 percent you know last year This time last year 40 of homes were Selling above their final list price and Again that whole fear of missing out Last year super duper destructive now Let's really dig into inventory because That is one of the most important phases In this housing market crash so I'm Going to show you the reality of what's Going on with inventory then I'll do my Peak versus current comparison and in The conclusion and then I wish you guys A happy Friday but now let's start with Inventory I'm going to now access the Redfins monthly supply of housing take a Look what's happening with inventory so This is absolutely beautiful because
This is what we need to pay attention to This is the months of Supply available On the market this takes into Consideration demand so it's not just Unit numbers this is very important to Understand and really what I want to Show you guys is week to week months of Supply available on the market is Sky Rocketing upwards look at this guys We're now at four months of inventory And this is skyrocketing upward look at This this is skyrocketing upward but Look at this trajectory upward it is Absolutely beautiful we're now at four Months of inventory you guys this time Last year look this time last year we Were under two months so we are more Listen we are more than double the Months of Supply available on the market Than we were last year that is huge that Is huge that is showing us trajectory of The housing market it's showing us how Quantitative tightening is working our Months of Supply is skyrocketing up but That's not all let me show you Fred Economic data housing inventory as far As active listing counts not pending it Finally updated January 18th finally you Guys it did go down but I want to show You it only went down slightly look at This look at this is amazing you guys so We it only went down about six about 70 000 units so we're at 689 000 active units right now normally this
Should start you know going straight Down so what I want to show you is take A look at this is usually it goes Straight down from October so this is 2019 October it went straight down as of October look at that let's go to 2018 You guys can see as of October it Started plummeting downward this is 2017 As of September it started plummeting Downward and again this is active U.S Listings looking at 2016 inventory Started plummeting around September do You all see that but as you can see here We actually went up in inventory from September and October right and it just Now started going down a little bit in December so again in right now Quantitative tighting is beating normal Seasonal Trends because quantitative Tightening is not seasonal and that's Not all you guys know I love talking About new construction because they are Going to be underwater this year and We're going to start to see that but Take a look at this you guys know I love Referencing this this is the Fred Economic data monthly supply of just new Homes only in the U.S and I just want to Point out this is a 10-year map right Here okay so this is a 10-year outlook Look at we're at 8.6 months of inventory In new home construction which means if You're blessed enough like I am to be in A metro area with a lot of new
Construction we're going to we're Getting good deals you know we're gonna Get way better deals but they're the Price cuts and the buying incentives Right now amazing right just remember And I thought that would happen last March and that's where we're at right Now but you guys 8.6 months of inventory And look at how high that is over the Last decade we have so much new Construction inventory it's outrageous But not only that have an insane amount Of new construction Historical amount of new construction Being built so not only is it a buyer's Market in new construction as we go into 2023 new homes are going to be flooding Flooding the market this chart right Here goes back to 1969. So we're going back to 1969 and we still Have never had this much new home Construction look at the last collapse Even in the last collapse we didn't have This much construction right so in other Words inventory as we go into 2023 is Going to absolutely explode In Most Metro areas so now let me do the Peak versus current comparison and if You're a new viewer let me explain how This works so I like to see how much Money we saved if we waited to purchase From the peak in June so we're going to See based on the peak in June versus the Current information how much you would
Have saved if you waited so remember you Guys what I'm going to do is take the Median sales price as the loan amount I Understand that's not how you come up With mortgage payment because there's a Down payment you have to do a couple Calculations but just for the sake of Ease we're going to take median sales Price and the average interest rate During that time and let's see how much Money we're going to save in seven years So I'm only looking at a seven year Savings because most people live in Their house for seven years before they Sell how I do this is I just go to Google and I type in mortgage calculator And this comes up so this comes up right Here if you guys click include taxes and Insurance this can actually do a lot you Know better job at proposing mortgage Payments but obviously you should go to Your loan officer so let's take the June Peak of 391 000 we know back then the Interest rates average was 5.78 which Basically means if you purchased in Peak Not only was the median sales price Average 391 000 your mortgage payment average was 2 289 so now let's compare that to what's Going on right now in order to do that I'm going to take 350 250 as a median Sales price and then I'm going to add The lower interest rate of 6.01 and I just want to remind you guys
This interest rate is higher than the Interest rates in June yet the payment Is much lower and that is why I keep Saying interest rate is not as important Than price let's see how much money we Save which is a hundred and eighty seven Dollars a month so not only are we Saving a whopping 187 dollars a month We're also saving 4 31 thousand dollars Up front now most people are financing The home purchase so let me show you What you're going to save on payments in Just seven years so I'm just going to Pull up this General calculator right Here we know we save 187 dollars a month On the mortgage times 12 months gives us Our yearly Savings of two thousand two Hundred and forty four dollars times Seven for seven years that means our Seven year savings on just mortgage is Fifteen thousand seven hundred dollars Plus the Forty one thousand dollar Cheaper average median sales price gives Us a total average seven year Savings of Fifty six thousand dollars if you stay Patient and waited to purchase a home in Conclusion understand that things are Still fundamentally overpriced and Overvalued and as we go into 2023 we as Buyers on the sidelines need to be Patient and in my opinion we need to go Out there if we do decide to purchase And low ball everything and stay patient Because regardless of what people are
Saying mainstream media the data y'all Is on our side and I believe after February the media will have no choice But to take what's happening now and put It in mainstream and when that happens I Think the price decline gets even worse Because what happens around that time Inventory drop our spring inventory Drops so I think this is going to be a Whole bunch of factors that really crush The housing market after q1 of this year All right so we'll watch that together Now other than that guys I really hope You guys got some value insights and Perspective in today's video and if You're out there investing in real Estate you know I wish you luck and I Hope you win
