ZILLOW: 90% of Homes Are Losing Value | Housing Market UPDATE

I honestly wish somebody would have told me how overrated it is to own a home. My fiance and I just sold our house. We are back to renting. I'm ecstatic. He's ecstatic. We're saving so much. We were really young and stupid when we bought our house. So I'll give you that. But the weight that has been lifted off of our shoulders is I can't explain it. Zillow is now reporting nationwide home prices declining with 90% of the top metro areas now experiencing month over month price decline. Now, in today's video, during segment number one, we're going to break down Zillow's August housing market report, and we're going to show you guys that many homeowners can't sell their homes right now, even when they slash their sales prices under market value. Now, segment two, we're going to look at the top declining metro areas from peak, some of which are clearly crashing right now. Now, segment three, we're going to unpack the rental market as it's finally seeing some clear affordability relief at the same time that institutional investors are giving up on the existing home market and instead switching to bill to rent communities. And having said that, happy Thursday. Mortgage rates went up just like we warned you guys about. And welcome back to Real Estate Mindset. You guys already know that this video is going to be absolutely bonkers. Mitch Vexler, how are you, sir? Isn't it interesting that Zillow is now reporting home prices are on the decline, and yet Jerome Powell came out and said the exact 100% opposite. How is that possible that the Federal Reserve doesn't read? And that leads people to do things that they wouldn't otherwise do. And then with regard to that young lady's comment about homeownership and the weight of homeownership, it's not just the fact that new homes are not necessarily built to the quality of previously built homes, but homes come with maintenance. And even if you have an older home that has a maintenance, it has a ticket associated with it, and not everybody can afford it. And they don't consider that when they're purchasing a home. Best to look and quantify than jump off into the fire from the frying pan. That's right. And sometimes homes come with price decline, as the viewers are about to see. According to Zillow's August housing market report, sellers slammed the brakes. New listings fall to record low for August. And I'm going to show you guys, even though that's true, it's still up about 15% year over year. So it's specifically talking about new listings coming to the market. Now I'm going to do three bullet points. Market momentum shifts. Buyers' recent run of gaining leverage is cut short. That's false. Bullet point number two, price cuts ease from peak. The share of listings with price cuts moderated to 26%. And it's interesting they say moderated because it's still near a record high. So I don't know if moderation means a record high or not, but it's down from the all time high of 27% in July of this year. Inventory is high, but shrinking while total for sale inventory is up 15%. There it is year over year. It fell month over month as the flow of new listings slowed to a trickle. Sellers took a step back from the housing market in August in response to slow demand from cash strapped home shoppers. Buyers still in the market have plenty of opportunity, especially in inventory rich environments. But competitive momentum that has been swinging fast in buyers' favor in recent months is showing signs of stopping outright. They're just saying, Mitch, not slowing down moderately like above, but straight up stopping. Where? Everywhere? Yeah, everywhere nationwide. As a result, home value appreciation has slowed to a standstill. Typical home value growth nationwide measured by Zillow's home value index is now flat. It's actually down. So they're not even acknowledging that this is the first time that home values fell this much in August since August of 2022. So instead of saying that, they're just saying it's just flat over the past year. Why didn't they say that with inventory? Right? It's just flat year over year. No, they said it's record low. So they did that with the inventory, but not with the prices. This is the second slowest annual growth of any month since the start of 2018. Homes are lingering longer before finding a buyer as well. The median time on market for a sold home is 27 days, a full week longer than last year and one day longer than pre-pandemic norms. So they're sitting on the market longer than pre-pandemic. That's what I wanted to point out right there. The housing market, you guys, is completely changing right before your eyes. Shifting to a hyper seller's market, and you guys are about to see this, to a hyper buyer's market. That's going to be a market that's full of insane buying incentives and massive price cuts. In fact, there's markets like that already. Potential sellers are probably comfortable with their home for the present, likely enjoying a low mortgage rate and significant equity growth. And I brought that up because I wanted to acknowledge that that is different than the global financial crisis. The global financial crisis, people didn't have equity. Today, people have equity, but that same equity is bankrupting them. Let's talk about home values. Now, the first thing is the typical U.S. home, according to Zillow, is now $363,946. If you make $60,000, $70,000 a year, you can't touch that, obviously, right? That's the problem here. Now, home values climbed month over month, and only two, guys, of the 50 largest metro areas, which is Buffalo and somehow, I don't know how this is possible, but New Orleans. New Orleans is in the gutter right now with home prices. So the fact that there are one of the two only metros that went up month over month, astonishing. Now, home values fell on a month over month basis in 90% of U.S. metros across the nation or 45 of the top U.S. metros. The largest monthly drops were in California, San Jose down 1.7%, San Francisco down 1.4%, Austin 0.8%, Seattle 0.8%, and San Diego also 0.8%. And it's important to know that's month over month declines. When we look at home values going up year over year, home values are up in half of the metro areas. And when we look at home values going down year over year, home values are down in half the metro areas as well. Now, when we go to inventory and new listings, new listings decreased by 3% this month compared to last year. So they're creating that little bit of a pandemonium at the beginning, but it's only down 3% year over year. That's it. There were still 15.3% more listings active in August year over year. So we still have 15% more than last year. You get it? Inventory levels, however, are still according to this 19.5% lower than pre-pandemic levels for the month. Newly pending listings decreased 2.6% in August from the prior month, but they did increase 4.6% year over year. That's a pending listing. That is not a closed transaction. Now, when we look at Zillow's market heat index, they're saying the strongest seller markets in the country are Buffalo, Hartford, San Francisco, San Jose, and New York. It's interesting because didn't San Francisco and San Jose have price decline or something? Interesting they would say it's a seller's market when that market can't support the prices that people are selling their houses for. Interesting. The strongest buyer's market in the country. Do you guys remember how many years we were sitting back listening to how Miami is exploding and everything's great in Miami and massive price increases in Miami? It's all changing right before our eyes. Now it's Miami, Austin, New Orleans, Jacksonville, and Tampa. Mitch, sir, you and I both know how important the housing market is for like the world economy, let alone the American economy and for the health of the financing and banking sector. They've capitalized our houses. America knows that now. We've been robbed of the American dream of home ownership. Everyone gets it. My question to you is what do you think that the Fed is going to do next? Because they will, Mitch. They're going to do something next. What do you think that the Fed is going to do next to try to keep the housing market propped up? Whether it works or not, I don't know, but what are they going to do next to try to prop it up? The Fed has many levers that they can pull. The problem is every lever that they have pulled without exception has turned into an out and out disaster. They monkey with normal market conditions when they pull the levers. One of those levers is lowering the interest rates. However, that's a short-term issue right now today as in they just lowered it yesterday. But the point of the matter is it's a mistake. And the reason why it's a mistake is because they created the inflation to begin with. So what you have is the American population literally being batted back and forth like a ping pong ball courtesy of the Federal Reserve. So they create a false narrative. They did this obviously starting back in COVID, but they've done this for multiple generations. Every excuse turns into an excuse. Well, let's monkey with the markets. Let's do something for the American people when in fact it does the exact opposite. The markets, if left to their own devices, fix themselves. The banks, if left to their own devices, would go bankrupt for the banks that are bad banks and the good banks that are good banks would survive. Every time, like I said, without exception that the Fed gets involved, we end up as society having to pay the piper, having to pay the price for their negligence. When they save banks, they print money. If they print money to help the housing out, one of which is, okay, if you're going to print money, that is a tax, that is an inflation. Either way, the American public ends up paying for their negligence. That's one of the reasons why I've stated multiple times that the Federal Reserve should be shut down. We don't need it as a society. And like I said at the very beginning, how can you look at what Jerome Powell said in his statement that everything is fine in the marketplace and Zillow is saying the exact opposite? It begs the ultimate question, which one of these two idiots got it wrong? Bottom line is that the American public, every single property owner, and every single citizen who goes in to buy something at a store ends up paying the price because they can't leave the markets to run the markets. We see that because they interfered in the market again and residential mortgage rates went up just like they did in 2024. The Federal Reserve is designed to take from us, mom and pop, and this is no conspiracy theory, they take taxpayers, they take from mom and pop, and they give that stuff, our stuff, to the banks to support them. I mean, there's no question about that anymore and I really hope the people that are watching this wake up to that because you need to properly insulate yourself. And some of the things you could do to insulate yourself is just spend your money wisely, for number one, and don't partake in this rat race that's our society right now. Now, speaking of paying the price, Mitch, the problem is, and as you're about to hear, some homeowners right now can't sell their properties, even under market value, and they're not happy. 107 of us trying to sell our home here in Florida, and it is not selling. I know everyone keeps telling me in the comments that it is our price, and I'm telling you guys it is not our price. We've dropped our price three times now, but we are lower than everything else on the market. If you guys have any suggestions, what else to try? I mean, it's a bigger house, so maybe there's just not families our size that have this. So we're a family of six. It's a big house. Yeah, I don't know. Maybe there's not people our size. Maybe there's people sort of in our price bracket who are trying to move to our area. We're gonna try to get a professional photographer to come in and kind of stage the house, get the drone, get the 3D imaging, all that stuff to see if presentation will just get more eyeballs, and then more eyeballs will be showing. More showings will hopefully eventually equal a sale, but man, if you guys have any recommendations, put them down in the comments, man. I'm all ears. I do have some recommendations. You're gonna have to cut the price in your house a fourth time, possibly a fifth, sixth, and seventh time, because that's exactly why it's not selling. And speaking of price declines, let's move on to segment two, and we're gonna take a look at metros that have the largest amount of decline from the peak, which a lot of times is either from 2022 or from 2024. This came out two days ago from Wolf Street, titled The Most Splendid Housing Bubbles in America. The August 2025 price drops and gains in 33 large, expensive metros. Overall, U.S. home prices fell once again year over year, and they fell in, according to them, not Zillow, 21 of 33 metros falling in Tampa, Austin, Miami, San Diego. Remember these guys, Los Angeles, San Jose, San Francisco, San Antonio, Dallas, Phoenix, Orlando, Atlanta, Denver, Raleigh, Houston, Seattle, others up year over year, Boston, Chicago, New York, Philadelphia. It's still bifurcated. Here's another chart on the Zillow data. They just made their own chart based on their Zillow data, but this is measuring the change in percentage from a year ago. And you guys can clearly see the housing market is clearly losing steam, just like it did back in 2022. And remember, in 2022, we experienced home price decline. We experienced actual nationwide deflation in the second half of 2022 and during the beginning of 2023, but that was stopped by the bank term funding program, the number one declining metro area, which is Austin. You guys see that on your screen right here. Austin is down right now, 23.2% from peak. It is down also 0.5% month over month and 5.8% year over year. And I'm going to slide down here and I want you guys to see the trajectory because what's interesting is, is not all housing markets are experiencing price decline the same way. Some it's a total free fall like Austin. Others, they're trying to rebound, but they crashed again. But take a look at Austin. It essentially shot straight up. And then now it's shooting straight down. Who knows how much longer that's going to happen. But what I wanted to show you as well in Austin is, is the overwhelming amount of existing home inventory. They have at least a nine year high right now in inventory. So that's only going to make that housing market more of a buyer's market. Number two is actually, according to this San Francisco, which is down 10.7% from may of 2022 is peak. It's also down 0.6% month over month and down 3.8% year over year. And take a look at this house in market. So this one again, shot up, shot straight down. And then once you see this rebound right here, that's the bank term program. That's when they re-inflated the housing market. You can clearly see that right here. And it makes sense because this is what Silicon Valley. And remember they made the bank term funding program for who Silicon Valley. That's where the bank failures happened. And you can see that in this chart, but now once again, they're running out of money and home prices are dropping again, active listings are shooting up. California is about where it was pre pandemic. So listings are going up in California, which is a beautiful thing. California needs some relief with affordability. Number three is Phoenix. All these mentors have been to Phoenix is down 10.1%. You guys see that here from the June, 2022 peak, also down 0.4% month over month and 3.6% year over year. And take a look at this housing market again, you guys skyrocketing upward and then straight down and look just like the last Metro bank term funding program, inflation reduction act, massive deficit spending, multiple wars. Look at this. And it rebounded a little bit and now it's deflating once again, when we look at number four, which is San Antonio, that's also down from the 2022 peak by 8.4%. It's also down 0.2% month over month and also 3.2% year over year. This is an interesting price decline because this has been a steady decline. So San Antonio against sky rocketed upward, but look at this steady decline downward and look at the seasonality kind of balances out prices and then they go down and then seasonality balance out except the recent season. It just has been going down the entire time. This is demonstrating more pendulum swings in the housing market. Here's Denver. I also traveled to Denver, which is down 7.2% from the peak in 2022, also down 0.2% month over month and 2.8% year over year, just like the other Metro skyrocketed up, started to plummet downward bank term funding program comes rebalance the housing market for a little bit. And then it starts declining once again, active listings in Denver. Like this is going to be a problem. This is going to be a long-term problem for Denver. They're about to see that because this chart, this chart goes back to 2017. Look at how much inventory they have compared to 2017. I mean, there were times in 2017, they only have 4,000 units right now. They're over 12. They have three times more housing units than they did in 2017, three times more housing units, guys, they got a big problem. They're going to have to figure out how to deal with that. Number five, Sacramento down 7.1% from peak also 0.4% month over month, 2% year over year, a lot more room to go. And just like the other Metro spike up spike down bank term funding program kind of balances out the housing market, reinflates it a little bit. And now it's deflating once again. Lastly, let's look at Tampa, Florida, which is down 6.7% from its peak in 2022, also down 0.7% month over month and 6.1% year over year. That is a doozy. And look at this. Florida is very interesting. So it skyrockets up, goes down a little bit here, bank term funding program, and then reinflates. Everything seems to be fine. But what's interesting about Florida is the trajectory of the last season. The trajectory of the last season is this is going straight down. Almost black nights, home price change from recent peaks. Here's the top Metro areas of home price decline. According to black night, let me zoom in on this for you guys right here. Now, the number one is Austin. That's down 20.2% from peak, but also they're saying core Cape Coral, Florida, and that's down 14.1% or $63,000 from peak. And by the way, they're saying that Austin's down $120,000 from peak yikes. Number three is North port, Florida down 12.2% from peak or rather $62,000. You guys, San Francisco down 9.3% from peak down $115,000. Number five, usual suspects, Phoenix, Arizona, down 6.8% or rather $35,000 from peak. Why is the housing market so bifurcated? I mean, it really is. Why do you think that is exactly? It's not bifurcated. It's scattered like a glass being thrown against the wall and you end up with dozens of pieces of broken glass. So there's many different demographics inside of the jurisdictional issues of where the property is located. So we've been pounding the table that nothing else matters other than the median household income in your geographic vicinity, because real estate is all local. Well, if you understand what the median household income is, you can quantify who your buyer is. And if you can quantify who your buyer is based on the median household income, then you can quantify the appropriate price for your house. Realtors don't talk about this because they don't know about this, but it is median household income. And that is all that matters. We've said it dozens of times. Now you're seeing why. And with regard to somebody saying, well, I'm going to go on my third, fourth, fifth lowering of the price. If the realtor can't get the job done on three lower rings, best to pull the property from the market, fire the realtor, get a new realtor, but wait 90 days in order to do so. And then you always have the option, depending on your financial status of simply saying, I'm not going to participate in this because I can't replace what I have. And therefore you just simply say, I'm not going to sell it at this time. There's unfortunately are a lot of people that bid off on the narrative that they were sold, which is everything is fine. Jump into the water. They bought houses that they can't afford. And that is why I have also said we are right back at 2007, except this is going to be magnitudes worse because now we've got not just the real estate, but we've got the box. And Mitch, here's the thing. It's not just existing homes that are sitting on the market. You're going to see that it's also new construction homes that are absolutely beautiful that are also just sitting on the market collecting dust. Guys, honestly, aren't going to believe this. Those townhomes are still for sale over two years later. It's almost unimaginable. They could build all these condos and let them sit for sale for so long. Some of them listed for almost 600,000 still. So recently they put a whole bunch of money into this quiet, serene public landscape area. It's right here on one of the busiest streets in town. I'm literally having to yell so you can hear me. So basically all these units are just emblematic of the greater housing market, where there's so many refusals to lower prices. You can see that all these years later, the for rent sign is still up. Personally, I believe a three bedroom, two bathroom, whatever on one of the busiest streets in town with basically no yard isn't worth more than $250,000, $300,000. But that's just my opinion. And I guess in the olden days, people not buying it would drive the prices down, but that's just not how it works anymore. It's anybody's guess as to what's going to happen here. But I want to say thank you to those of you who've been here since the beginning, all those years ago when I made one of my first videos about this place. And I'm sorry, we haven't seen that price crash that we've all been waiting for. But the fact that these still aren't selling is a good sign. Something's coming. If I were to guess what's going to happen next, I would say that they're going to lower the prices or they're going to go bankrupt. Moving on to the rental market, which might be finally seeing some true affordability, but honestly, it's not much. You guys, prices are out of control still when compared to our income renters make affordability gains for the first time in four years. Few bullet points here, guys, rent growth stalls. The typical us rent held steady at a whopping $2,007 from July to August. And the unfortunate thing is they're saying this, but rents are still up 2.4% from a year ago, according to Zillow. Number two, affordability showing first improvement since 2021. When did affordability improve in 2021? That's interesting. Incomes rise as rent growth stalls. A renter looking to move into a typical rental would now spend 28.9% of their household income on rent, which is the first time a renter affordability has fallen to this level since October of 2021. Rental concessions, however, now this is the good news set another record and that's not in the data. So they may get two free months of rent. And when you divide that into the actual rent, rent could be 20% cheaper, but it's not again showing in the data, but it is showing it in rental concessions as 36.7% of rental listings on Zillow offered a concession in August, making it a new record high, which again, that's pretty astonishing. Now this is interesting as well. Rents did fall, however, on a monthly basis in 20, actually 20 metro areas. The largest only monthly drops were in Austin, yikes, Austin 0.9% down, Providence 0.5, Denver 0.4, San Antonio down 0.4 and Boston also down 0.4, but rents were also up from a year ago in 46 of the 50 largest metro areas. Highest increase is actually Chicago at 6.1 San Fran 5, 1 New York 5 yikes Providence 4, 6 and Kansas city 4.6 as well. Also coming out a couple of days ago from Wolf street, this article titled the biggest single family rental landlords and multifamily landlords in the U S big shifts underway. And I want you guys to pay attention to this because there's a reason why institutional investors are no longer purchasing existing homes. In fact, they've stopped purchasing existing homes since about 2022. And they've moved on to something else because again, the price doesn't make sense. Even the top guys know that. So learn from them. Let's read a little bit of this. The top six family rental landlords own 422,000 single family rental properties. The top six multifamily landlords own 660 rental apartments and listen to this guy's mom and pop landlords own 11 million single family rentals out of nearly 50 million total rental units, big multifamily landlords and mom and pop single family landlords are classic elements in the rental market. But the single family giants are a new creature that came out of the housing bust after home prices plunged in the global financial crisis. So we don't want that to happen now. And since 2022, these single family rental giants have been selling individual houses that they have bought starting in 2012. So a lot of people like they're never going to sell. No, they're going to sell everything because the price is too high after having cut back on their purchases of individual houses years earlier and prices have become too high to make their rental math work because they use math to invest, but they've been adding new construction of entire for rent developments to their portfolios, focusing on the higher end. And some of these giants even have their own home builder divisions. And I wonder if that's what Warren Buffett was doing. In other words, they're shredding some of their scatter site properties and have become net sellers of them while adding entire bill to rent developments to their portfolios. My question is, especially because we're trying to abolish property taxes, which would lower the price significantly and lower the payment significantly. We don't want institutional investors purchasing single family residences of these houses that we abolish property taxes. We don't want that. I mean, it's easy to say that, but should institutional investors be completely banned from purchasing existing homes in the housing market to make room for Generation Z? This is another one of those. The glass has just been slammed against the wall and now we've got shards of glass. So several things here. The average for rent, bill to rent, single family community, generally speaking, can only be built on about a six cap, which is a 6% rate of return, assuming all cash. It's not high yield. It's being built by private equity and hedge funds. And I'll touch on that in a second. But can you imagine that as a renter, your property tax, what you pay to your landlord is roughly $4,000 to $6,000 a year. If the property tax didn't exist, you wouldn't have to pay that. Now think of what your rent would be. And that actually plays to the net operating income on the balance sheets of the hedge funds and any of those people who have invested in multifamily. With regard to the idea of saying, well, the institution shouldn't be allowed to invest, it's the United States of America. Anybody can do anything they want. However, caveat emptum, buyer beware. So hedge funds and private equity don't perform. And that's why the average yield on the stock market to any of these institutions is around, magically, a six cap. So if you look at CalPERS in California, what's the average yield to CalPERS? 6%. Begs the question, what's the purpose of the hedge funds? What's the purpose of the private equity? The answer is fees in the middle. They don't give a about the profits. They don't give a about their investors. They never have, they never will. So what should be banned is a rescue package, not stopping somebody from investing. It's the rescue package. You do not, under any circumstance, Federal Reserve, rescue a hedge fund, a bank, or private equity, let them go broke. That's what they deserve. You made these choices. And a lot of the product that these people, entities have invested in will come back to the market. And it will come back to the market in the form of much lower prices. That's when people should be buying. That is when Gen Z should get in, caveat emptor. Watch what Now in conclusion, buy smart and remember that buying a home is the most expensive and most important financial purchase you will ever make in your lifetime. So treat it like that. Be patient as the market cycle continues to shift, maintain your purchasing power the best you can by having little to no debt and as much savings as possible. And understand at this current time, renting is generally way smarter to do. You have flexibility and you have a much better opportunity to save and invest your money. Now, as you're waiting, take my courses and take them now. They are made for you and are for free. These courses are designed to turn you into an expert better than 90% of realtors and loan officers. So please let's grow and win together. And having said that, if you're out there investing in real estate, you guys already know. I wish you luck and we hope you win.