Listings Flood The US Housing Market As Buyer Demand Drops (FED rate cut failed)

Okay guys, this is it, a Redfin report just dropped the bomb on us as new listings flood the U S housing market and pending deals drop all at the same time. And this is over the last four weeks, even after the fed started to cut rates in this video, I want to explain to you why this is happening and where a massive opportunity is right now for real estate agents. But before I explain to you why this is happening, let's dig a little deeper into exactly what is happening. New listings creep up as would be home buyers back off haunted, haunted with Halloween coming up by high prices and economic unease. And so what happened here was new listings in the U S rose 4.1% year over year. Okay. That's the biggest increase in over four months. Okay. Four months. Whoop-dee-doo. Okay. And at the same time, pending deals year over year fail 1.2%. That's the biggest decline in over five months. And this is all happening during, during this time when mortgage rates have dropped and the feds, the feds started cutting rates. Okay. And what's very interesting is that prices, medium home prices are up 1.9. Let's just call it 2% year over year home prices nationally are still increasing. This is the second biggest increase in six months. Okay. And it's great for homeowners because it's maintaining equity, but it's keeping payments elevated, even though they're down from their all-time high. And I'm going to show you that in just a second. And so the Washington DC pending sales are falling more than they are nationwide. Um, a lot of that has to do with, you know, the government and the, you know, there was the shutdown. There was all kinds of stuff going on, uh, during that period. But if we go down here and we look now, let's really pay attention to what's happening here. Okay. And, and, and by the way, um, days on the market are up to 48 days right now. Um, I saw that somewhere in this article right here. Um, 48 days, uh, on the market a week longer than last year. And what we have to understand is that the national, like historic average is 50 days. Like if we get back to 50 days, that's literally getting back to just a historical average. If we're even over 50 days, a little bit, not a big deal at all, but I'm going to share a lot of interesting points in the rest of this video. So stay tuned because I want to show you some historic data and I'm really going to show you why prices haven't come down much and why they're essentially not going to come down any more. But if we look at this data here. I really want you to pay attention to this, especially the mortgage application data. Okay. We're down 3% from a week earlier. Okay. But we're up 20% year over year, 20% more purchase applications, mortgage purchase applications coming through the door. Okay. Um, the home, the Redfin home buyer demand index. Okay. We're up about 2% from a month earlier, but we're down 10% year over year. And so if you think about data, okay. If you're a Doomer and you, you, you want to push the narrative that home prices are going to come down and you know, home prices are going to crash, et cetera, you can take this and say, well, the Redfin home buyer demand index is down 10%. So there's fewer, you know, home buyers out there, but look at the rest of this data because you can look at it both ways. And I, and I tend to look at a, at a glass half full situation. And that is mortgage purchase application data. Uh, uh, applications are up 20%. Okay. Google searches homes for sale. It's up 18% from a month earlier and up more than 20% year over year. Also touring activity, people actually not just putting in applications to get alone, but actually going and looking at homes. We're up 15% from the start of the year. Um, at this time last year, it was down 2% from the start of the year. We're up 15% from the start of the year. So in my mind, there's a lot of incredibly positive things happening in the market because you have to think, okay, well, there's more listings and there's fewer pending deals. Well, I mean, if you look at pending deals, which you can see right here, okay. Like you it's down 1.2%. You can see right there that we're down 2.7% from last year. But if you look at 2000, we're, we're above 2023, but if you look at it, it's all kind of in there and it all kind of intertwines and intertangles and kind of ebbs and flows above and below each other. These three years, 23, 24, and 25, um, all the way through. So there's going to be a month where we're up 1.2. There's going to be a month where we're down 1.2 or we're up three, where we're, you know, it's all going to be right in there in line, pretty similar, nothing to worry about. Okay. Also, what you have to remember is going into the fall, going into the fall, the market slows down every year. Okay. Nationally, the market tends to drop off and lose some activity going into the fall. We're going into the winter. Now we're into the fall. We're going into the winter. So this is pretty normal for this time of year for things to slow down a bit. But what I think is interesting is that Google searches are up. Um, home applications are up. Touring activity is up. This is all incredibly positive information. Not to mention we still have home prices and that, and that the home prices are maybe the most stubborn of all the data and what's really holding the market back from really taking off. Yes. If we can get mortgage rates down, because it all comes back to what that monthly payment is going to be. But as we can see here, the medium monthly payment has dropped $300. Since may. Right. And may was a record high. Right. It's down $300. Okay. It's up 1.1% year over year. Okay. This time last year, but it's down 300 bucks from may. So keep that in mind that tends to be headed down right now in terms of the monthly mortgage payment. I'm asking price is still up 2.3%. A penny deals. Of course, we talked about that down 1.2 new listings. Um, and this is for, this is for an entire month, four weeks. Okay. Um, 89,756 new listings. Okay. That's a 4.1% during that. Uh, for four week period, what you got to realize is that back in 2008, we were stacking 250,000 new listings a week. Not, not in a, not in a four week, not in a month. This is a month. We're talking about 89,000. We were stacking 250,000 new listings a week, right? We were throwing a million listings a month out there. Um, and right now we have 1.2 million active listings back in 2008, 4 million listings, 4 million. Look how far we are away from those numbers. Okay. Months of supply. We're at 4.5. Okay. Back in 2008, we were at 10 months of inventory. Okay. 10 months of supply of inventory. So there's, there's a huge difference. We're like so far away and it's not like it's jumping up there. We've been in this downturn for almost four years now, four years now, and prices still aren't coming down. They're coming down in some markets. I'll show you in just a second, but there, but nationally I'm talking nationally, they're not coming down. We're still at all time highs right now. Um, so let's dig into that a little bit. The median sales price. So Cleveland saw the biggest gain with 12%. Okay. And we had Detroit, Providence, Anaheim. Um, and the biggest, um, the biggest decline was Austin, Texas at 3.8%. So the biggest, uh, biggest increase was Cleveland at 12%. Detroit was 9%. Providence was 7%. The biggest decline, the biggest was Austin with 3.8. So you see the, the, the, the markets that are increasing, increasing a lot stronger than the ones that are decreasing. Okay. Dallas was down 3%. Atlanta was down 2.5%. Jacksonville, 2.2. Uh, Fort Lauderdale, 1.9. These aren't massive jumps, 12% Cleveland. That's a pretty big jump. 8.9% a positive gain price-wise in Detroit. It's a pretty big jump. Okay. Let's look at pending deals in Tampa. We saw an increase 15.9% of pending deals. So remember pending deals nationally. We saw a drop 1.2%. Okay. But look at these individual markets, West Palm beach up 13.7% San Francisco up 10% Pittsburgh, 10% for Lauderdale up 7%. Okay. Then San Antonio was down pending deals. 15.8. Seattle was down 15.2. Denver was down 12.7. So real estate is so local. Okay. We, you, you can look at things on a national basis, but then you have to really dig in and take a magnifying glass and really zoom in to your market to really understand what is happening. And then you can even zoom even deeper into, you know, the sub markets of, of each of these markets. Okay. Because that's the thing, even in these bigger markets, those sub markets are even so much different than the overall Tampa market, right? You look at the overall Tampa market, then you zoom into Clearwater and these other places, it's, it's totally different than this 59% increase in pending deals, new listings, same thing, 25% increase in Tampa. So in Tampa, we have the biggest pending deal increase and we have the biggest new listings for us. Huh? Right. So when you think about that, if new listings equal pending deals, right? If you throw inventory on the table, that's what I'm saying. This is such a good thing to have inventory jump up 4.1%, even when pending deals are down 1.2, because we're, we're putting inventory on the table. We're moving into a slower market. Interest rates are coming down and we're going to see next week if the fed cuts rates again. And then here we are median home price. And you can see there, we're at an all time high for this moment in the year. This moment in the year, we're at all time high nationally. Right. All time. I, and I'm on, I'm going to tell you why this isn't, this isn't going to come down. Like it's not going to come down. It's not good. A lot of people are like, man, all these sellers are like crazy thing is it's not going away. It's not going to the median asking price is up there, right? We're up there at the all time high with this, this time in the year, the payments and you can see the payments were lower than we were back in May. We're down $300. We're also down from where we were back in 2023. We're up a little bit higher than where we were last year, but I expect that to continue to come down and make affordability better and better. Okay. Pending home sales down 1%. We looked at that new homes, 4%. All right. We're right here. Okay. So, so let's look at mortgage rates. Okay. Mortgage rates. So right here. So, so, so August 1st, I call the bottom of the housing market all August 1st, because we had the bad jobs report. Okay. And from August 1st, which is where's August 1st, August 1st is about right here, about right here, 6.7, right around in here, 6.7 ish. Okay. Then it drops, it drops. Uh, and then the fed actually cut rates right about here, right here, actually right here, 6.6, 6.26, right? Which is really as low as it got. That's when fed cut the rates. On that day, on that day, right there, September 15th, the day that the fed cut rates, so all the, all the time before fed cut rates is when mortgage rates cut came down, not when the fed cut rates. Remember the fed rate does not, um, isn't, isn't, it doesn't line up with the 30 year mortgage rate, right? That's more so the 10 year treasury. It's what lines up with the 30 year fix. And so the mortgage rates came down before the feds cut the rates. And then when the feds cut the rates, actually mortgage rates went up and went up from, from 6.2 to 6.3, and now it's back down to the 6.2 right now. Okay. So, so all the activity really saw was before the fed cut rates. That's why I'm saying that the four weeks after the fed cut the rates, well, we had already seen the rush of activity before rates before, before, and rates actually went up a little bit. That's why I think that we didn't really see much activity is because mortgage rates went up after the fed cut the rates. And I think that slowed some of the momentum that we had from rates coming down, although it did a little of it did continue. It had a lot of people put the brakes on. So that's why we saw, um, listings hit the market because, you know, people saw rates coming down, seller saw rates coming down and said, okay, here's an opportunity, let's put our home on the market. But then when the fed cut rates, mortgage rates went up and activity slowed down a little bit. It doesn't mean it's gone. It just means that, that the market is so sensitive right now because of how high prices are, mortgage rates are like literally the only lever that we can pull. So when they go up just a little bit, then it means a lot when it comes to activity and when they come down a little bit, it also means a lot when it comes to activity. So we know the 30 year fix is connected to the 10 year treasury. So what's the 10 year treasury doing around? Well, it finally got down below four. It's at 3.982 right this second. And so that's very interesting because since that's the case, and it just kind of started to happen this last week. And finally, I believe Friday, it finally got under four. We may see another, uh, another push to the downside with mortgage rates. We'll have to kind of wait and see how that affects mortgage rates this week, but I expect to see a little bit of, uh, relief there when it comes to mortgage rates. So when you think about the reason, right? Why prices aren't coming down anymore. Okay. Well, there's a lot of reasons, right? One reason is the fact that there's so much equity out there and some sellers are literally home owners are sitting on such low rates because they either refinance or bought during the refinancing boom back in 2021. Okay. 62% of homeowners are sitting on 4% or less over half of the homes in America own free and clear. We're literally at an all time high. This is a fact we're at an all time high with the amount of homes that are free and clear 62% of the rest of the mortgages are 4% or low. And literally half of the mortgages out there, half of the mortgages out there, the, the owner owes 50% or less. Okay. On average, homeowners have $302,000 worth of equity on average. That's also at an all time high. And when you think about the homes that are selling right now, okay. Home sellers are seeing profits as high as 60%. Okay. And, and this is from, from Adams, um, the, the media, the, the data company Adams and, uh, 49.9, let's call it 50% was the average, the national average profit margin for selling a single family home and condo condo and home. And that was up slightly from 49.3. Um, posted in the second quarter. So, so people, owners, when they sell their home, they're literally making a 50% profit, okay. Right now that's, that's, and let me just say, like the reason prices aren't going to go down anymore is because of this chart right here. This kind of tells you everything you see right here. This is existing home sales. And you see right here that this 4 million mark right here. Okay. This formula mark, and you see back in the nineties from 94, 95, 96, 97, four years, it was around 4 million existing home sales, and then what did it do? It went back up, went back up to 5 million and kept going back in 2008. We saw it. Oh, eight, nine, 10, 11, 12, four years. We saw around 4 million existing home sales. And what did it do? It went back up and went to 5 million pretty quickly. Okay. And now where are we right here? We're right here for four years, 23, 24, 25, and 26, right? 22, 22, 23, 24, 25. We're moving into 26 going to be four years. Every single time existing home sales gets down to around 4 million existing home sales for three or four years. What does it do? It takes it a couple of years to get back to 5 million existing home sales. But what, here's what I, here's why I don't believe that prices are going to come down anymore. They've come down in some markets and a lot of markets, half the markets out there, actually, but I don't believe they're going to come down anymore. Why? Because I believe that the way this whole thing works is that prices adjust to keep existing home sales around 4 million a year, right? I think 4 million years, kind of like it, like when you think about the five D's, what is it? Divorce, diapers, diplomas, death. Um, and there's another one. There's the five D's, right? They're just life, uh, experiences that happen. That doesn't matter what's going on with the market. It's going to create activity in the housing market. Things are going to move. Things are going to happen. People need to change. People need to move. People need to relocate, et cetera, et cetera. So what happens is, is prices adjust to a point where the existing home sales stay around 4 million. Once prices adjust, once home sales gets around 4 million, I don't think you're going to see much, much more, uh, to the downside in terms of prices go, but now we're kind of coming out of this cycle where now the feds are starting to cut rates, 10 year treasuries coming down. Mortgage rates are coming down, uh, activities up. So I could bring my five-year-old in here and look at this chart. And they, she could probably tell you exactly where existing home sales are going to go next year. And it's exactly what Fannie Mae said. Along with other, uh, big entities, NBA, uh, NAR home sales to jump nearly 10% in 2026, okay. Mortgage rates also expected to fall, fall down to 5.9 Fannie Mae. Um, they expect they're forecasting an annualized existing home sale rate of 4.446 million by the end of 2026, well above the 2025 forecast total of around 4 million, okay, around 4 million. And, and they, and they've, they've steadily increased this back in February. Back in February, they were saying that it was going to be about 6.7% next year. Okay. 6.7% increase. So they still call for an increase back when they're they're February forecast. But now that we're here in October, they're actually, they've increased and actually increased it in September as well. September and October is kind of the same. They were expecting about 10% increase next year in terms of transactions. And when you add new home sales into the mix, we're looking at like 5.3 million, you know, five, you know, 5.2, 5.3 million home sales next year in 2026, and that ladies and gentlemen is going to be a boost for you and your business. Now, let me talk about something just to bring light and be totally transparent about what's, what's happening from all different angles right now. And then I want to get into what the biggest opportunity is for you right now as a real estate agent. And the bad news here is that home sale cancellations have spiked. Okay. They've spiked. It was actually an all time high one in seven deals fell through. And in, in August, in August, we saw 56,000 homes purchases canceled. Okay. That's 56,000 deals. That's over a hundred thousand real estate agents didn't get paid on that deal. That's 56,000 sellers who thought that they were going to move and the buyer backed out or, or whatever, whatever happened. Okay. That's 15.1% of all the homes that went out on a contract that month, literally evaporated. Okay. Literally evaporated. And the biggest cause of that, they say 70% of the calls was inspections. And if, and if like, if you've been around real estate, as long as I have, you know, that most people that back out because of the inspection, it's not because of the inspection. I just had a flip that I did was doing, and I had it under contract in August. My, my, my deal was probably one of the ones. It actually is one of the ones, one of the 56,000. I'm flipping a deal, went under contract. They did the inspection report. They didn't even come back and ask for any repairs or any credits or negotiate. They just like send a cancellation, right? They just sent, sent a release on the contract and you can't do anything. It's literally a legal way out. You really, as a seller, you can't do anything about it. You literally just have to let them walk. So then what happens is, is you become a little more skittish on your next offer. You're asking for more earnest money. You're like asking for shorter inspection periods, you know, you're making it tougher on the next buyer. And that, that creates a lot of friction, friction in the market. So that's a little tough, but I want to say this. That, that this, um, August, okay. What was an all time high with the amount of cancellations. It was literally the month that I called the bottom of the housing market. I believe that August marks the bottom of the housing market. I also believe that it will mark the toughest month that real estate agents will ever see in history. The toughest month, because home prices are all time highs. You got cancellations at all time highs. Okay. You're never going to see a market that's tougher than the one you're going through right this second. And I also believe that when a market turns around and has the other direction, we see a lot of conflicting data right there at the turning point. Where we see that there's a lot of activity and we see that new home sales have a three month high. We see that cancellations are all time high and we see a lot of conflicting data. I think that's normal, right? That's normal for when the market turns around, because you still got a lot of positive and negative things going. And it takes a second to flush out all that negative, uh, that, that negativity in the market and get to where it's just mostly positive stuff. So be on the lookout for that moving forward. Okay. So where is the biggest opportunity right now for real estate agents, right? Not only to do tons of deals right now, but to also best position yourself in this market as it's that begins to rebound, which we, we feel very certain that transactions are coming back next year in a way that's really going to boost our morale, it's really going to boost our business is going to give us some hope here moving forward in 2026. Well, when I went through this same thing back in 2008, when I went through the exact same thing in 2008, I asked myself this one question. Okay. And the question was, what's the best deal that I can get for my ideal client that I can leverage into deals today, closings today and relationships tomorrow. That was what I was focused on because I lost everything. I got in, in no two, I made a meal. I lost it all. I was sleeping in my car. I came back in real estate. I learned all my lessons and I thought, okay, how can I actually build a business? And where's the deal right now? Where's the opportunity that I can come in and offer this opportunity to my target my target client that I want to do business with in a way that I can actually do deals and create incredible relationships because I knew relationships over transactions moving forward was going to be my mantra. It was going to be the only way to build a business that a market cannot. It can't take it out. It can't, it can't touch a business that is deep rooted with relationships with property owners in the market. So I thought, what, what is the best deal at the time? And at the time it was foreclosures. So I literally could call property owners that, uh, that own the exact property I wanted to sell. I wrote letters, I called, I did all the things and I said, Hey, you know, I see you're here, would you be interested in a property just like that for 50% off? And some people were like, yes. I was like, great. Let's go take a look. I got one right here. Let's go. Let's write it up. Let's multiple offer. Let's win the bid. I want a lot of bids. We had multiple offers back in 2008. Some people were like, no, I was like, okay, great. Do you guys think you'll ever do anything? Cause I'd love to work with you. Right. When that day comes, I'd love to be your agent. You know, when, when you decide you actually want to move or buy another property or whatever it is you want to do, I'm here to help you. And I built relationships with people regardless if they wanted to buy or not. I was able to offer them properties half off, which was the thing I was leveraging to, to begin the relationship. Instead of trying to take something, I'm trying to give something. And then I was able to actually nurture all those people into this seven figure business over time. And I became the number one agent in my entire MLS. So what is the deal right now? There's always a deal on the market. What is the deal right now that you can use to leverage into the same thing? And you can think three to five years out, because I knew this when people bought foreclosures from me, they were, they were going to buy the foreclosure. Then over time, prices will go up for closures will go away. They would let me sell that property for a profit, flip that money into another property and upgrade in something else and refer me three or four people to do the same thing. That was my thought process. If I can pitch foreclosures to property owners, they're going to buy with me now, sell with me later, buy with me some more and refer a bunch of people to me. And I am going to be the number one agent in my market. It's the exact same thing you can do right now in this market. And the deal right now, this similar to foreclosures is new homes, new construction homes. That's the thing that you can offer your clients, your clients, uh, and say, Hey, here's a deal, right? These builders are literally trying to give these properties away. They've got rate buy downs. You can get a really cheap mortgage rate. You got closing costs taken care of. You got appliances. They're throwing furniture in prices are down X amount. They're literally trying to give these things away. If you would like to, to upgrade your old home into a new home, or if you would just like to buy some new homes as rental properties, like I did, I bought five Dior Horton homes in 2022. I've still got them. They're cash cow. They went up like 40, 50 grand. They went up more than that. They went up like 60 grand since I bought them a piece and they're still throwing me 700 bucks a month of peace profit. I'm just sitting here waiting for my heist, the high school to be built right down the road to see what I want to do with them and flip them into some commercial properties. Nevertheless, these are the deals that you can, you can present to people. Right. And so new home sales in the month that there were all time high cancellations, we saw a jump in new home sales. So this, I'm saying positive data and negative data colliding. Okay. New home sales in the month of August soared 20%, which is a three year high. At the same time, we see an all time high in the same month of cancellations of contracts. Well, these new home sale contracts, I don't know if they were canceling. They closed it. They up 20% three year high. And so, so what you got to realize is that I've been trying to talk to you guys about new home sales and new construction for a while now. Okay. This is the play right now until this goes away. It's just like foreclosures back in 2008. That was the play until foreclosures went away. Okay. And so I played them until they went away, but guess what I did when they went away. Guess what I had? I still had the people that bought the foreclosures I sold to and I was still doing business with them. Okay. When you sell these new constructions, you're still going to have the people in the homes and as these deals and new constructions go away, guess what's going to happen? Prices are going to go up. I mean, think about it. When the buy down rate situation goes down for, for home builders and they quit doing all these incentives, it's going to be for a reason. They don't have to anymore. Why? Because prices are back. Prices are increasing. They don't, they're not going to do it if they don't have to. That means prices are up. That means these host houses that you're selling right now are going to be worth more money. And now you've got a client with equity who wants to upgrade into something else who wants to sell that upgrade. It's this exact same thing as the foreclosures back in the day. In my opinion, like this is it. And you're literally just using it to get your foot in the door with people, just to create conversations and to begin incredible lifelong relationships so that you can build your business. So that's all I got for you today. I hope this video blesses you and gave you some incredible insights so you can go and build your business. I'll see you on the next video. Until then, keep selling.