Just ask Zillow the real estate company Issuing a cautious outlook for the Current quarter citing headwinds from Elevated mortgage rates and weak demand From first-time home Buyers Zillow issues a warning to America about the slowdown in the Housing market and sites mortgage Interest rates and the lack thereof Firsttime home buyers but the Interesting thing guys is they're Projecting a massive downswing in the Housing market without acknowledging any Potential job losses or recession we're Going to listen to a video from the CFO Of Zillow who is Jeremy Hoffman talk About aggressively talk about what Zillow is up to and what they're warning About the housing market now if you're An agent a loan officer or a realtor you Understand that Zillow in at least in my Opinion I don't want to get in trouble But they're starting a monopoly they Want a monopoly in total control over The housing market right now what's Going on it's crazy it's a data game Data is almost Godly powers and Zillow wants all of the Data what's really interesting guys is They're also growing in many different Niches in the real estate industry like Being loan officers and lenders and also Doing realtor and also being landlords You guys Zillow is helping in my opinion
To manipulate the housing market and I Really hope that America starts to wake Up now one of the questions that I want Consumers and viewers to be able to Answer by the end of this video is what Can firsttime home buyers potential Firsttime home buyers do to improve Their purchasing power we don't just Want to stay stuck on the sideline Twiddling our thumbs waiting for a Recession and housing market crash to Come knocking on our door Often by then It's too late so we have to be able to Answer right now how how do we increase Our purchasing power now in addition to Watching the video with the CFO from Zillow I'm also going to show you what Secretary Yellen has recently said about The housing market and firsttime home Buyers she's the secretary of the United States of America so I'm going to get to That but let's jump into the first part Of this video where Zillow although They're issuing a warning they're also Telling you that they're having Exponential growth in certain sectors of The housing market again they want a Monopoly they want a monopoly on the Housing market let's get started by Listening to what they view their Strengths are can you tell me and what Color can you give on what you are Seeing from those firsttime home buyers And where you were maybe seeing strength
And weakness during the quarter not just Last quarter but in the current quarter As well yeah absolutely I think it's no Surprise that when uh interest rates Spiked the way that they did uh in the Back half of the quarter in March and Into April uh we started to feel some Impact in the housing market and that Was reflected in our guidance I think at The same time we look at what we did in Q1 uh and we outperformed the real Estate market by 900 basis points uh and That was on the back of strength from All parts of our business so our Residential business uh grew by 900 by 9% excuse me uh our mortgage business Which is where we provide mortgages to Zillow home loan through Zillow home Loans that grew 130% and then our Rentals business which we shined the Light on yesterday Grew 31% overall as well and that was The seventh consecutive time in which We've outperformed the residential real Estate market so we feel really good About what we're in control of uh Despite the fact that home you know home Buying right now is tough so what you Didn't hear is the 15 seconds prior to That clip where he briefly acknowledges That the industry is slowing down as a Result of number one mortgage interest Rates and number two because the lack of New homeowners I'm sorry rather first
Time homeowners they don't want Experience they're not saying experience They're saying the naive firsttime home Buyer so it's fair to say they're saying The market is not naive enough for us to Grow would you agree let me know let's Go back into the video where the CFO is Now going to acknowledge a little bit More in detail mortgage interest rates And unaffordability okay but first I do Want to ask you about mortgage rates and When you expect some relief on that Front and how that's going to flow Through to your business yeah I mean I Heard it from the guests just before you Know how challenging it is out there to Try to expect what the fed's going to do Um you know our view is that housing's Going to be roughly flat this year and We don't necessarily take an in-house View on mortgage rates specifically but We think the housing market is going to Be flat as affordability continues to be A challenge uh at the same time we do Know that it's a growth industry over Time and we feel like we're well Positioned to take advantage of that you Know when the time comes again you know No mention whatsoever about recession Inverted yield curves massive Equity Runup things of that nature and no Mention over the biggest thing of all Prices the PE Ratio is exploding it's Gotten even worse it's now updated for
January let me show you I want to make It a point to say it is so important to Site your sources of data we need to Triangulate data this is from longterm Trends. net okay this is the home price To median household income so how many Years of median the entire household not Individual but median household Income into house prices you guys can See this updated in January to 7.64 exceeding any time in history as Far as PE ratio exceeding even the GFC By I would say a substantial amount and In a faster amount of time astonishing Astonishing stuff price you guys is Extremely Extremely important now let's hear what Zillow has to say about the rental Market and I'm going to tell you guys Again right now why another Institutional Investor purchasing single Family residences driving the prices up Unbelievable right absolutely Unbelievable but yes you guys Zillow is A landlord listen up this it's Interesting that you are making that Increasing bet on rentals right that There is that rental portal portal on Your site alongside the ability to look At homes for purchase is this a bet that This will be a prolonged cycle that more People are not going to be purchasing Homes but rather going to be looking to Rent yeah I think it's more you know
What we're trying to do at Zillow is be A housing super app so that means that We're providing services to anyone That's trying to move in any capacity Whether that's being buying selling or Renting and rentals has been a bed of Ours for a long period of time we've Invested against it as a result of that And of course having all the inventory On the home side and as much inventory As possible on the rental side is a Benefit to our consumers because they Know what's out there for them whether It's the the right choices to buy or to Rent and obviously in A Moment Like This Renting does make a lot of sense uh and We like the consumer experience we're Building plus the business opportunity We see over time renting does make a lot Of sense especially when when it comes To zillow's desire as he said to become A super app really a monopoly once again In the housing market but again we hear Total lack of caution in fact the only Time that I've heard personally Zillow Say it's a good time to rent is when They're bragging about the profits that They're making as landlords Maybe I'm Wrong here now this here should remind Us that we cannot get lazy when we go Into the next pendulum swing okay to Repr prices to prices go down to where We have price Discovery there's going to Be buying opportunity my concern is when
Will the next buying opportunity be After this next one being how much we've Learned about fraud greed and corruption In the housing market in addition to That let's hear what Zillow has to say About the Nar commission lawsuit now I Want you guys to understand as viewers That loan officers in real used to fund Zillow Zillow made so much money selling Leads to loan officers to Realtors so The fact that they're stabbing us all in The back and consumers in the back Should be a wake-up call to you no one Cares about your investment more than You care don't trust people and if you Do trust them verify um Jeremy let's Talk about the N settlement as well National Association Realtors of course The settlement that could affect um how Commissions are paid um I think Everybody's still trying to get their Arms around it talk to me about how it Could affect your business could you see For example A A Drop in your income from The sort of Premium listings if you will Yeah I mean it's definitely noisy out There right now real estate is always a Well talked about category just given The importance it has in the economy and Also just in people's lives uh so it's Definitely been a lot of speculation uh And big headlines I think for view we Think Buyer Agents uh those that help People buy homes add value we've seen
That over the nearly 20 years in which We've been oper all you know I just want To go on record to say it adds value to Their bottom line because those agents Pay them money for leads reading Zillow Uh you put yourself in the in the shoes Of a first-time home buyer and you Remember how confusing that process was And how emotional it is and how Infrequent it is we think real estate Agents provide a ton of value and we'll Continue to do so regardless of the Settlement uh and then for Zillow we Orient ourselves around the most Productive real estate agents and the Most productive real estate agents have Been taking share over time and we think Will continue to take share so we look At the opportunity in the evolution from Here as opportunity really more than Threat uh and I think we've proven that Out in the past and we'll continue to to Look to do so so only the most Productive agents are getting market Share and to explain what that means Only the agents that are paying the Money to get the lead share are the Productive ones but regardless he said It from his own mouth they see it as an Opportunity agents remember that stop Buying their leads they want to take Your job and they may successfully do That because Realtors have a lot of Ground to make up to gain the trust back
From America and half the agents don't Even know why the public doesn't even Trust them to begin with it's because The dishonesty it's because the Corruption it's because of the excessive Commission gains that you can make you Can make as an agent more money than a Surgeon despite all of that firsttime Home buyers especially have a lack of Knowledge and comprehension in the Housing market and so some of the things That you can do as a consumer to Increase your purchasing power is is Usually just three things your credit Your income and your assets your credit Is fairly easy to manipulate just no More bad stuff from happening and Understand it's how you use your credit Cards that matter most you don't want to Go over 30% of your credit line ever in fact if You're over 30% of your credit line pay That credit card down now the second Thing is in income remember you guys not All of the income that you make can be Used as purchasing power usually if you Make a W2 income it's easy to prove but If you have a second job like GrubHub or You have a 1099 job remember you need a Two-year history of self-employment Second job bonus overtime or commission So get started right away and hopefully If you've already started working a Second job hopefully you've had that for
Two years and can use that income as Purchasing power the third thing being Savings assets most important thing to Do re-budget most people's been way too Much money on subscriptions and going Out to eat doing those two changes Minimizing those expenses alone should Allow you to save a lot more money a Compensating one of the major Compensating factors when it comes to Purchasing houses especially if you have Low credit is having money left over After you purchase a home it's called Reserves you want two to three months of Reserves after you close reserves means A mortgage payment so you need to have Two to three months of mortgage payment Saved after you close as a general rule Of thumb now let me show you okay it's Regardless of all that the economy is Horrible because of many things not just The greed corruption and fraud also the Government the fed the way that they're Spending even yelling treas treasury Secretary Yellen got involved and said This this is from Fortune this is what She had to say while house prices having Gone up and now with much higher Interest and mortgage rates it's almost Impossible for Firsttime buyers Yellen said the article Goes on yelen also cited the lock in Effect as a major obstacle for new Buyers the phenomenon is when current
Homeowners are reluctant to sell their Home home out of fear of losing their Low mortgage rates only to trade it for A higher mortgage rates a pair of Housing tax credits proposed by Joe Biden however could potentially help Ease the lock and effect and it's Basically a $10,000 credit potentially If you sell your house she end by saying We know that affordable housing and Starter homes are an area where we Really need to do a lot to increase Availability and one of the things that I think that they could do to increase That availability is if going to Continue to deficit spend spend money That they don't have use it on making Projects of affordable housing we know There's deficit spending because we see It right here there's already a trillion Dollars in deficit spending year to date During the peak of the GFC in 2009 the Deficit spending was 1.42 million stop Spending our money and adding to the Inflation I think that would be pretty Helpful I mean tell me what you you guys Think I mean when the government keeps Spending money to fight Wars or whatever It is they're doing inflation reduction Act whatever it is funding the IRS Anything that they're doing these money Spurts are wrecking us because remember We as taxpayers have to pay that and Even if it's not coming out of our
Paychecks it's certainly coming out of Our wallets when we leave our H in fact When we even stay at home electricity Everything and so again I believe that It's going to take a half a decade to a Decade for balance to come back to the Housing market things are so out of Whack right now it is impossible for Things to sustain we are just swinging The pendulum is just swinging to the Other side and the powers that be are Trying to slow that down I believe as a Result of the presidential election but The pendulum is swinging and we are Going to go through times to where we Get back to balance but that may take Again 7 to 10 years and so in the Meantime we again as consumers if we are Forced on the sideline or if we are Deciding to be on the sideline not only Do we have to understand hyperlocal data We have to always always try to stay Ahead of the inflation by working on our Purchasing power credit income and Assets and that is the answer to the Question on how do firsttime home buyers And really any home buyer at all improve How do they improve their purchasing Power now if you want a booster shot of Skills and knowledge I have a free home Buying course it's probably about two And a half hours it's in the description Below I pay money to have that Accessible to you my thank you to the
Community for supporting me now other Than that guys I really hope you guys Got some new value insights and Perspective and if you're out there Investing in real estate you guys Already know I wish you luck and I hope You win
