is the real-estate market crashing let's find out what's up everybody BC welcome back to another article now if you remember about two or three weeks ago I made my market predictions for the real estate market gave my opinion on kind of where the markets at and where it's going I'll remind you of some of that stuff here in the beginning and I've read some articles and kind of have seen different opinions about what's going on I wanted to share it with you and really we can come to our own conclusions basically on is the real estate market crashing now the first thing people have to realize is in every business and every profession in every area of life stock market real estate you're gonna see cycles you're gonna see ups and downs okay so we've come out of the last what five six years of just since 2012 before I got into the business the market has been shooting back up and recovering from the Great Recession that we saw eight - I mean what was the 2007 8 until 2010-11 alright so not too long ago about ten years ago okay I had been calling since July August of last year already a adjustment we first see adjustments they normally get hit right in the higher end the luxury market you're usually gonna see indicators in the luxury market first typically right so read some articles took a look at some things and what I did was I wanted to condense it in a few bullet points read some of this to you and then we can discuss it a little bit okay so June July of 2018 and this particular article I can link it below was published I believe February 12th of 2019 so four months ago yeah I reported that June July 2018 and this is national stats overall if there's any hyperlocal stats I'll make sure that I point them out to you okay June July 2018 nine point six percent reduction of sales in real estate of home single-family homes year-over-year okay so 10 percent 15 percent fewer offers and a lot of the speculation from the public was well the prices are going up so much that the taxes are gonna be so high if I buy a new home or if I sell can i buy again so we're kind of gonna wait right and we were seeing kind of that attitude from people now me and my team who talked to people all the time because we make phone calls and go door-to-door we started seeing this a little bit okay now as this goes on it gets more interesting right so that was June and July in September we see again East Coast buyers are kind of waiting most of the sellers that a lot of these people that were interviewed for this article one in particular said the majority to sellers virtually all of them meaning the individuals who have sold their homes were either moving out of state or staying locally however they weren't purchasing they were renting because of this thought that in the next year to 18 months the market would crash and sales would decline and prices would lower right and I can tell you that we saw prices go down about 10 percent in a year period year over year at least in Southern California for the average price point I believe it was 8 or 9 percent or something like that ok and I believe I listed that in my previous article I'll leave that on the cards and on the end screen for you so this is again 2018 we already covered June July we covered September now going into October sales month over month from September to October go down another eight point nine percent nationally and the peak being in the Midwest down 22 percent month-over-month okay three point six percent overall nationally and inventory and one month nationally rose seven point four percent on average so the sales at that point in October of 2018 were at a two and a half year low pretty interesting right so what we're seeing is obviously the market is cooling down now I had already called this July August of last year which is this article is referencing and we're hearing this and reading these statistics now from October which is pretty interesting okay now we noticed that as well I had called it I had already made adjustments and I had already seen that hey you know the the sales are slowing down we knew this would happen because prices were fluctuating and on average going up about nine eight nine ten percent a year and we've been seeing that for a while and there's gonna be a point where that hits a ceiling buyer confidence goes down right interest rates are still low but eventually you know people's income isn't that much every year so that we're gonna hit a point where now we just can't do it anymore and there's gonna have to be an adjustment and I believe based even with this article saying that we've been seeing a market adjustment since last year it's been about a year now almost because we're in June of 2019 so again sales two-and-a-half year low October 2018 we fast forward now to November right of that same year in 2018 we're seeing the highest interest rates in two and a half years right mortgage new mortgage applications their lowest since December of 2014 isn't that crazy so even though right we're coming from if you compare it to you know 15 20 30 40 years ago the interest rate is still relatively low I remember people were buying homes for 15 20 22 % you can still see the means right but we're coming out of the Great Recession where interest rates had dropped significantly and now even now they're about 4 percent but back last year November they reached a peak which I believe was four and a half to five at least in our area I don't know what it was nationally so highest interest rate two-and-a-half years mortgage applications again lowest since 2014 that's interesting homes sales eight straight months or going down every month right the percentage of home sales is going down for eight straight months and year-over-year in November from 2017 to 18 in California sales were down 12 percent year-over-year 12 percent interesting right now a lot of the people particularly this person who wrote this article kind of looked at Seattle as kind of like the the indicator right basically hey if we take a look at the Seattle we can kind of see nationally and predict what's gonna happen so November of 2018 and half a year he saw the statistic that that average price in Seattle had gone down from seven hundred and twenty six thousand I believe this was in Kings County I believe of Seattle you can check the article to confirm seven hundred twenty six thousand down to six hundred and forty four thousand and half a year and an 11 percent drop in the average price point right he had also seen in Vegas out of the ten thousand homes for sale the inventory Adams out of the ten thousand seven thousand had received no offers that's down and in regards to offers down 50% year-over-year so it got worse by 50% in one year flips were at an all-time low okay now going into December nationally a sales down Earl down 11% sales down 11% this is December of 2018 that's the largest annual drop since the recession eight or nine years ago interesting right Wells Fargo on the mortgage side Wells Fargo for the fourth quarter right we're gonna talk about Wells Fargo and JP Morgan Wells Fargo the revenue was down 50% to four hundred and sixty-seven million in the fourth quarter of 2018 that's down 50 percent from the previous year then JP Morgan was at 203 million which is a 46 percent drop right so I threw a lot of statistics at you in this article and now we've kind of talked for a couple minutes interesting right so the indicators show that we're kind of hitting that peak and now we're already starting to decline home sales are down we're seeing inventory shoot up around like you saw seven point seven point four percent increase I think from what I've seen around here I remember you know two or three years ago the inventory here in Southern California being as low as only a couple weeks worth of inventory you know and you were getting 15 20 30 40 offers on homes and now we're seeing a couple months of inventory typically and most markets here you know three or four months so we're getting now into that normal market face so if you're not aware a seller's market would be considered zero to six months of inventory right six to twelve months would be considered a normal market and then anything over a year's worth of inventory would be considered a buyers market so pretty you know in one or two years pretty significant increase from weeks of inventory now to getting closer to a what we consider a normal market so what you're seeing here is the manifestation of what I said before you know it can only go up so long and then it eventually has to be can come down and we're seeing it come down now so you know if you're the consumer or you're an agent the markets the market right as far as I've seen from my n with my lender and their practices they're still very strict when it comes to mortgage applications even the assistance programs like downpayment assistance the requirements are pretty now as I say this I want people to understand this they're still gonna be Realtors and lenders who do shady stuff right that's just the way it is I'm speaking from my perspective and the team and the people that we work with okay we have a high standard so we're not contributors to what we can say of what we saw at the Great Recession years ago so you know if you're a buyer or a seller you do want to stay up to up-to-date on the market but contact somebody who knows what they're talking about and who can give you real facts you know I read a ton of articles and they were all over the place some articles were biased saying the markets fine some were like this some more worse so what you need to do is get the real data and track the market yourself or have a trusted real estate agent or team like us or anyone else in your area that you follow they can kind of keep you up-to-date on what's going on cuz the facts are the facts and I just read you some of those numbers that on average are nationally some markets nationally here in the United States are still doing well some are doing worse than others like you saw in the Midwest that month-over-month sales drop of 22 percent it's pretty significant so certain areas are gonna feel that pain and that that collapse we can say or decline much more intensely than others just like when we had the crash and the Great Recession you know LA Vegas New York all the bigger cities were you know they went from you know six or seven or eight hundred thousand average price point down to two hundred but then you look at interesting facts you look at markets like Iowa the average price point when a crash went from a hundred and twenty thousand to a hundred and fifteen there was no difference at all I know obviously it's a smaller state with less people but again you know certain areas hyper locally are going to feel the impact at a different rate so this information applies differently to people in different areas but overall we are seeing as I even called it July of August of last year a decline in the market is that to say it's gonna crash we'll see but the indicators show that it will keep declining and where that bottom is I don't know but we are hitting that point like I said affordability is getting kind of crazy taxes would be too much for people and we're not seeing income rise at that same rate so we'll see I guess we're just gonna have to kind of go on the crystal ball and rub it and see what happens next okay I would love to hear your opinion on what's going on I am in agreement that it is gonna decline and keep going down of course because that's just the way it is are we in for a horrific crash I don't know what do you think let me know okay so we'll wrap up the article here thank you for reading if you guys are interested in my podcast supreme being make sure you check it out also if you're a new watcher and you're in sales real estate you're an entrepreneur I do have a coaching program with over 300 people called moderate success you're more than welcome to check it out it's on my website