New home construction may never be as Important as it is right now and we have To ask the question our new home Builders ceasing operations are the Prices and sales plummeting for new Homes and our new home builders really Offering 4% mortgages and his inventory Really skyrocketing all things that You're going to learn today on real Estate mindset where every day is Absolutely Bonkers and please don't Forget you guys I am not a financial Adviser and my studio behind me is not Yet complete but my bio is also someone That can walk away from both clout and Money if it means my Integrity is Possibly at risk and I want you guys to Always remember that that's exactly what You're going to get from your host I Will not M my viewers for everything That they own I get people that Constantly ask me Travis what is your Goal of real estate mindset why do you Have real estate mindset when are you Going to start making money and I Respond to the same way every single Time because I understand my goal my Goal is to be able to afford to help Teach people and help people without Having to charge them their life savings My goal you guys is to improve the world Not make money from it now if you guys Like my goals and you like my BIOS do me A favor like the video but most
Importantly you guys shoot me a Bonkers Below we're going to start with Zillow And a couple key bullet points and then We're going to cover all kinds of data Starting with the title of this report Which is May 2024 new home sales fell Despite easing mortgage rates in May and That's because interest rates really Didn't go down that much and the prices Of houses are way too unaffordable in That income hasn't grown now there's Really three bullet points guys number One there were 69,000 new single family Home sales Nationwide that seasonally Adjusted that's also down 11.3% from the Revised April rate of 698,000 and listen To this guys this is a huge blow to new Home builders right here it's 16 .5% Below May of 2023 and I want you guys to Understand again sales are plummeting They're absolutely plummeting they're Tanking with new home sales and you guys They're already offering 4% mortgage Rates I'll show you that here in a Second now bullet point number two the Median sales price of new home sold was 417,000 that's down 0.9% from a year ago Now remember you guys they drastically Revised median sales price for new homes Before they revised it the peak was Close to 500 ,000 and that was in October of 2022 and I'll show you guys that here in A second now listen to this last
Paragraph by Zillow roughly 25% of Builders cut prices to bolster sales in May so again 25% of Builders cut prices And that's on top of additional Incentives because remember this guys The last thing that the builders want to Do is cut the prices and so they'll Think of a whole bunch of additional Buying incentives like refrigerator like Going to the design studio getting a Washer and dryer your interest rate buy Downs helping with closing cost anything But cutting prices so the fact that 25% Did is a great sign of things to come However the average price reduction in May held steady at 6% according to the National Association of home builders Now I want to take a time out and I want To talk about that for a second now They're saying 6% down but if you have a Great realtor and you're a great buyer You can find many properties well under 6% from market value in fact in my Market I can find homes with 10 to 20% Of wedge or undervalue and they're new Homes the key guys and don't forget this Is very hard to do you have to do an Analysis of the comparables that have Sold in the neighborhood or rather the Subdivision because you may find new Home builders that take off 20% of the Listing price but when you run the comps You'll find out that that may not be a Real 20% discount so a lot of times
They're saying 20% price cut 15 10% Price cut but all they're really doing Is taking the home value back down to Market value so always remember unless You have comps you guys are Flying Blind Never guys never forget that if you want The site okay if you want the site if You want to see you got to look at the Data you just have to guys it's and it's Not that hard it's not it's actually It's one of the EAS it's honestly they Teach the type of math it takes to Figure this stuff out in first grade I'm Telling you guys don't get lazy on me I Want you guys to step up please for me For me help yourself all right let's Let's move on now we're going to access A bunch of Fred economic data starting With median sales prices of new homes so It's important to understand we are Excluding existing homes and it's also Important to understand that new homes Are leading the turmoil in the housing Market I will show you that in another Video and I also want you to remember That they revised this data Drastically downward it's now saying the Peak of October of 2022 was 460,000 Remember you guys that was right at 500,000 they have revised a lot of these Peaks down4 to $50,000 it's absolutely Psycho but regardless we did have a Slight month-over-month decline of only $400 and you guys see in May of 2023 it
Was very close to the same median sales Price it was off by a little less than $4,000 so again once they revised the Data it really just looks like the Median sales price of homes have been Basically flatlined since March of 2022 But I'm telling you guys once again as Someone that goes out around the nation And I have access to mls in Houston I Could tell you guys they are under Stress and honestly if it wasn't for Subsidies and government grants and Things like that and special incentives These guys would already be going under Because the demand is just not there for The amount of inventory that they're Building at least guys understand in Houston and in Texas there is hypers Supply like crazy and also remember the Way that this data is reported is from a Survey that's it it's from a a survey That they are not required to complete Now ask yourself this can we really Trust that information ask yourself that I don't I don't trust these new home Builders but if you trust new home Builders then by all means trust the Data but I wouldn't I would trust the Comps or rather what are people paying Right now now this right here you guys Is absolutely Bonkers this is the Monthly supply of new homes in the United States and it is absolutely Skyrock and I told you guys there are
Some subdivisions to to three times more Inventory than what's listed on MLS or New home construction again two to three Times more inventory this is saying 9.3 Months you guys when we have over six Months of inventory the Market's Considered a buyer market and you guys Can see we have been holding steady over Six months again holding steady over six Months with new homes since March of 2022 and if they wouldn't have revised That data you guys would be able to see Clearly the price decline I there's no Doubt in my mind you guys that there's Price declines happening with new home Sales and it's not just in Houston they Have too much inventory we see it they Cannot sell these houses fast enough Because of the price guys it's the price That is so overwhelming but nevertheless If you're in the market for a new home I Mean you guys got options and you got Incentives however the prices are still Too high in my opinion but we're sitting At 9.3 months of inventory that is Beautiful now we need that with exist Homes all right now let's go into the Future of new home buildings what are They doing as far as construction starts Now we're starting here with permits now Permits did tick down pretty sharply Month over month we're still sitting at A whopping 1.4 million so we're still at Levels of pre- pandemic but the
Interesting thing is is it is going down That is a specific sign of distress with The new home builders they probably Don't want to tell the public that Because of the stop right as soon as the Public knows how in distress these new Home builders are I'm pretty confident That their stocks are going to go down Massively because there's a problem Right now and just it just appears that America hasn't woken up to that and the New home builders are denying it but Regardless they're still building a Bunch of stuff and they're requesting a Bunch of permits now taking a look at Starts we got 1.27 million starts going On right now that is down slightly month Over month now this is a low guys we are At a low of let's see since 2020 so We're around a fouryear low right now as Far as starts still around pre pandemic But I'm going to to be honest guys you Know as much as I dislike new home Builders and as much as I'm concerned About the quality of construction we do Need them to continue to build the Trends are starting to become alarming Because it's spring and summer home Buying season so the fact that these Trends are decelerating when it's Supposed to be the busiest time of year That's not good that is not good for Them and that's not good for additional New inventory coming to the market now
Is it good for us on the sideline that Are waiting for prices to go down or Rather a great deal yeah that's real Good for us but it's not real good for Our country in the sense that we need Building to continue that's what I'm Specifically saying now this one's real Crazy guys this is new privately owned Housing units under construction and We're like historic highs right now some People say this is one of the primary Reasons that we have not gone into Recession it's because of the jobs with New home construction and honestly got They got a great Point we've literally Even though this is trending downward You can see that it's actually Plummeting downward it's still Historically High I mean the last time It's been this high was in 19 73 that's Crazy in the 1970s so it is plummeting That's not good but they still guys they Still got probably a year two three Years worth of construction that is Going to feed the labor market and that Is going to feed supply but just like The other trends that I showed you it is Trending downward so we do want to keep An eye on that now I always say the Proof is in the pudding and if you want To believe the revisions from Fred from The new home builders that are filling Out a survey then by all means do it but I'm telling you I'm boots on the ground
I'm doing MLS and I'm comparing the data And I'm going to show you right now and Again you got to do the research with Comps I'm going to show you what lenar Is doing right now in San Antonio Texas As far as shaving the prices on their Houses because the reality is guys is it Is happening and it's happening around The nation despite what Bulls are saying And despite them trying to deceive us And hide the reality of what's going on All right you guys so here's some price Cuts right here this a $30,000 price cut This is a $21,000 price cut I mean and Look at the price points these price Points are low $200,000 price points let Me load some Mars see what else we got Here $40,000 price Cuts $20,000 price Cut $30,000 price cut 20,000 20,000 I Mean look at these are two $300,000 Houses if you're in California you're Like how can they make houses this cheap And I get it I don't know how they can Make them this cheap it's crazy to me How cheap they can make houses here but They are slashing the prices across the Board and this is just San Antonio go to Lonard yourself put in your metro area And hopefully you'll be lucky enough to Be like me surrounded by discounts and Like I said the low rates are nothing New that's why I'm saying that depends On your Metro era low rates don't Necessarily mean too much just it just
Really it does in some areas but in this Area it doesn't because look lenar is Already offering and they have been for Over two years fixed interest rates in The 4% Right Now lenar is offering a 4.25% FHA Plus $110,000 in closing cost Plus $20,000 off the price plus a Refrigerator and washer and dryer and Window blind package oh my gosh y'all See what I mean I mean they're trying Everything to sell these houses now I Want to tell you guys and I want to Remind you there's a huge problem going On even though they revised all that Data to in my opinion to mask the price Declines even if they didn't do that It's still worse than expected because They are not reporting seller Concessions as they are required to when Generating and calculating appraisal Value let me show you you know I know I Keep talking about this guys but it is Going to come to light eventually and They will be people that pay a terrible Price but this is from December 2023 This is Fanny May guys the real Bank of Fanny May now this is the appraisal Update and I'm going to go to the second Page here seller concession concerns and I'm going to take us right here to their Definition of value now there's two Things I'm just going to read the second One the price and again this is their Definition of value Fanny May the price
Represents the normal consideration for The property sold unaffected by special Or creative financing or cell's Concessions granted by anyone associated With the cell and again you see that Right to the left of me look at all of These incentives normal people that are Trying to purchase an existing home they Don't get those type of incentives they Are required to report that but as you Guys can see here many many many of them Are not now I'll read this within the Appraisal population appraisers reported Seller concessions for 7.6 million Comparables of great concern for 58% of these comparables the appraisers Made no adjustment for the concessions Of course this tends to inflate the Appraisal results and undermines The Credibility of the appraiser and so the Way I think if I purchase a new home and Something happened Quality Construction They're trying to strong Army the first Thing that I'm doing as a new homeowner To bought a new home I'm going to my Appraisal and I'm looking on my Appraisal to see if they properly made Adjustments for the value of my house And if they didn't do that then I would Say well the contract's void and I'm Going to go sue you potentially I'm not A lawyer I'm not giving you advice but What I am saying is is when people don't Do things the right way and they
Continue to take advantage of American Citizens then they should pay a price And things should change but the problem Is guys is they're not they are not Changing it appears right now things are Only getting worse and the reason that Is is because the system is designed to Not care about you in fact the worst Decisions that you guys make the more Profitable it is for the system and that Is a horrible horrible trap to be in in Order to get out of that trap you have To make a decision to get out of the Trap how do you get out you got to stop Stop what stop spending stop wasting Your money stop not caring and start Caring and if you're struggling you're All over the place say just take out a Piece of paper get a pen and and just Write down your goals and then go after Your goals guys you you can do it I'm Going to tell you you guys the beautiful Thing about life the beautiful thing About America is we can really become Anyone we want all we have to do Generally is make a decision to do it And then stick with it and demonstrate Tenacity and I'm telling you guys right Now you guys also had that god-given Gift and I want to see you guys utilize It I believe in you you're important to Me I love you guys I want you to do well And I really hope you guys got some new Value insights and perspective from this
Video and if you're out there investing In real estate you guys already know you Shouldn't be you should stop but if you Are I hope you win
