ZILLOW: Something CRAZY is Happening in the Housing Market #HousingMarket #AbolishPropertyTax #MortgageRates

If your home's been on the market for 30 plus days, it's not waiting for the right buyer, it's overpriced. It doesn't need more time on the market, it needs to be priced correctly. To sit on the market for more than 30 days is not aging like fine wine, it's sitting like stale bread. Buyers are looking at your house like a bad Tinder profile. You're simply just not going to be interested. Giving, nobody wants you, so why would I? The housing market continues to unravel, slowly revealing the long-awaited crash in home prices. Now, Zillow's most recent housing market report indicates that 94% of metros are having nominal home price declines, with price cuts near historic highs. And finally, we are starting to get some, some rent relief, as the report also indicates rent decline. Now, the question I have for you is, did you put yourself in a situation to take advantage of more affordable homes or did you jump on the bandwagon like millions of other buyers living with regret? Now, on top of Zillow's most recent reports, I'm also going to show you guys the secrets on how to find a great deal with wedge, which means under market value, and cashflow by accessing my live MLS server. Now, we're going to do an analysis on a home I found for sale in my market at $84 a square foot. If you guys make it to the end of this video, you will have the insights on how to maneuver through the most toxic overpriced housing market in history. And knowing these things are going to help prevent you from being like one of the many sellers who are trapped in their homes and can't sell. And having said that, happy Tuesday morning. Welcome back to Real Estate Mindset. You guys already know that this video is going to be absolutely bonkers. Zillow's brand new monthly housing market report for September titled, Lower Mortgage Rates Extend Housing Momentum into the Fall. A few key takeaways. The number of buyers markets have more than doubled, raising from six to 15 in the past year. Showing you guys that the housing market is, although it has taken a little bit of time because there's been an awful lot of greed, corruption, and fraud, and money printing, and inflation, and lies, and manipulation, and all of that type of stuff. But nevertheless, it was never, ever, ever going to sustain the prices because income didn't go up even remotely close enough for people, regular people, to afford to buy a house. It is meant to fail. New listings from sellers rose 3% year over year, emerging from a 3% annual decline in August. So that's interesting. So that flipped. Well, at point number three, buyers have 14% more options to choose from compared to just one year ago. A September dip in mortgage rates paired with stock market bump gave a boost to what is traditionally the start of the slow season in real estate. Activity from sellers and buyers is unseasonably resilient after a lackluster August. Unexpected showing of sellers in September. Typically, new listings drop off sharply into fall. They've fallen an average of 9% in September over the past seven years, making this year's mere 2% drop exceptional. Buyers' markets more than double as competition eases because again, the pendulum swing. We knew, we knew beyond a shadow of doubt that things were going to change because they always change. Real estate's in a cycle and hopefully you didn't believe a lot of the nonsense that was being spewed for years. A year ago, six of the nation's 50 largest metro areas were buyers' markets. This September, buyers have the edge in 15 markets. Zillow's market heat index shows the strongest buyers' markets are in Miami, that is a huge flip, New Orleans, Austin, Jacksonville, and Indianapolis. That's due, according to them, in large part to a surge of new construction in many of those areas in recent years, which is exactly why I've been traveling around the nation reporting new construction to you guys. The hottest markets for sellers, because the house market is bifurcated, are in Buffalo, Hartford, San Jose, San Francisco, and New York. Taking a look at home values, home values climbed month over month in only two, guys, only two of the largest 50 metro areas, okay? Which is absolutely insane, which was New York at 0.2 and Salt Lake City at 0.1. Home values fell on a monthly basis in 47 of the major U.S. metro areas. Leading the way is Austin down 1% over one month, Pittsburgh down 0.8%, Dallas 0.6%, San Francisco 0.6%, and Denver 0.6% as well. Now, that's the month over month. If we really want to eliminate seasonality, we also have to look at year over year. So when we look at year over year, home values are up in 26 of the 50 largest metro areas, with the gains being led in Cleveland up year over year, 4.6%, Hartford 4.1%, Buffalo 3.6%, Milwaukee 3.5%, and Chicago 3.4% as well. Now, home values are down in 24 major metro areas. So it's, again, about half, a little less than half. The largest drops were in Tampa, holy smoke, 6.4%, Austin 6%, Miami 5%, that's insane. I did not know Miami was number three. Orlando 4.7% and Dallas also on the list, down 4.1% year over year. Now, the name of the game is inventory. So new listings actually decreased by 2%, but that's month over month. Again, we want to look at year over year, as well as month over month and day over day, to be honest with you. Now, new listings increased by 3.3% this month compared to last year. So we still have inventory growth year over year, which is astonishing because, again, August, that flipped. So it's flipped back again. Now, new listings are 12.3% lower than pre-pandemic levels. I highlighted that because, although it's still under pre-pandemic levels, 12.3% is not that far off. And I'm bringing that up because what that's showing us is the golden handcuff effect is wearing off. Once we hit that 12.3%, once we're above that, we have a normal amount of new listings coming onto the market. Again, further demonstrating the golden handcuff effect is almost over. Inventory levels are still 18.2% lower than pre-pandemic levels. And that's on a nationwide scale. Obviously, housing markets like in Texas, Florida, even places in California, we have more inventory than pre-pandemic. But other places like New Jersey is in a world of hurt when it comes to historical amounts of inventory. Price cuts, 26.2% of listings in September had a price cut. That's compared to 25.8% of listings in August. And year over year, it was 24.9. So it is up as well year over year. People want to sell their house. They're starting to realize the only way to do that, as you guys are about to see here, is by dropping the price. That is literally the only thing you can do. Now, new pending sales, new pending sales listings increase. And I highlighted that because what? Increased 6.4% year over year. That sounds like demand is coming back and it might, but those need to turn into closed transactions. Pending really doesn't mean anything. It just means someone was interested. There's probably a contract. There's probably earnest money, but it's not yet closed. Now take a look at the rental market. Rents are now up still, unfortunately, 2.3% from last year. But this is the interesting thing. Rents did fall on a monthly basis in 26 of the top 50 metro areas. That was crazy. The largest monthly, not even yearly drop, is Austin down 0.8, Denver 0.7, Las Vegas 0.5, San Antonio 0.5, and Boston 0.5. And I'm gonna take you guys up here and we're gonna look at the concession map. If you guys come back here, take a look at some of the concessions. Like in Austin, 60% of rental listings had a price cut. This is absolutely, look at this, guys. This is crazy. Look at share of rental listings offering a concession. This is crazy. Absolutely insane. Nashville, Tennessee, 61.7%. You may wanna watch out for Nashville, but come back here and look at what's going on in the rental market because that's a really big deal, especially because we have even more speculation in our housing market right now than we did during the global financial crisis. Listen to three different videos of people that cannot sell their house and they're trying to figure out what can they do to sell their house. And you guys that have been watching probably know exactly what they can do. It's day 105 of trying to sell my home and my realtor suggests another open house. After 100 plus days on market, another open house is not the answer because who wanders in your house during an open house? Nosy neighbors, people who are just looking for snacks, and unserious buyers who have not yet been pre-approved. We don't even know if they're qualified to buy the home. That house has been available to the public for over 100 days. So why would somebody, if they were serious, not have already seen the house? They're not just gonna roam in from the street. If they were serious and already looking for a home, they would have already been to your house. Is it possible for someone to buy a home through an open house? Yeah, sure. But is it likely? No. The National Association of Realtors state that only 5% of homes are sold because of open houses, which also means that 95% of homes are sold without open houses. Not saying they can't work. I'm saying it is not how most homes are sold. And to give you a little insider secret, the agents that love open houses are the ones who get their business from open houses, meaning that they're not really there to sell your home as a seller, but they're there to get their next buyer client, so help the buyer find another home. The market is just being so silly goofy right now. This awesome house that I've been holding open for the past almost three months still hasn't sold for absolutely no reason. It's literally a gorgeous home. Let me show you. So my favorite part about this house is that it backs up to a green belt, so there's literally no one behind you. The yard is the perfect size for, like, your dog, but you also don't have to worry about too much landscaping because who wants to worry about that? Not me. Also new paint, cleaned travertine, new knobs, new range, new lights, new fans, new carpet. Not to mention it's in a super nice neighborhood with super nice amenities, less than 10 minutes to the beach. So anyway, we had a price reduction, so I'm gonna better hop on this. Had this house on the market almost six months and just haven't been able to sell it. Started at 390 and went down to 350. This house is in one of the better communities in our area, and I'm just shocked that I have not been able to sell it. So we did not finish the basement when we did the rehab because of the stairs going into the basement. However, I pulled it off the market the last couple weeks, and we're gonna go ahead and refinish it. It's gonna be a narrow stairwell going into that area, but I think it's probably my best move. So pulled off the market, put an additional 10 grand into it, and then probably gonna come back listing it at 370. So I'll let you guys see what we're doing down in the basement. So this is the dining room, and your stairs going upstairs, which is the master bedroom up here. So I'm working with that underneath me, obviously, already. And couldn't really cut into this space to create more headroom or to reconfigure the stairs without really destroying this room. I'm gonna help these people out right now. Nobody cares about that tiny backyard and your staircase that has a step up and a door in front of it. They care about the price, and if you don't believe me, then list your home for $1 and see how long it takes to sell. It's the price. And unfortunately, what people are gonna start realizing that are sellers is not only are their homes listed for too high, they're listed for way, way too high. We already see massive price decline going on with new homes. And again, that just shows you that the fundamentals just are not there to continue to support the prices and affordability in the housing market. And having said that, now, let's take a whole bunch of data, about 100,000 listings, and let's condense it down to about 1,900. And I'm gonna show you guys how to just use the math to find the deal. And it's important to understand that all you gotta do is use the math. You don't have to use your emotion, although every single agent is gonna try to get you to use your emotion and is not gonna try to help you figure out the math. So let me show you. So you guys should be familiar by now. This is my multiple listing service through Harris County. I have about 100, over 100,000 listings that I can search from. But I don't wanna look at 100,000 listings. I only wanna look at houses that are under market value. So the way I start this search, as you guys are familiar, is I just look by price per square foot. In my market, I go between 80 and 100 price per square foot. Now I have 1,900. So I've taken over 100,000 listings, and I've condensed that down to about 1,900. The way you guys need to do this is go to my website right here. You can go to the homepage and download this form that I made for you titled Subdivision Analysis Form, because that's what we're gonna fill out right now. Now, if you need to learn how to use that form and you didn't figure it out in this video, then take this class right here, which is how to do a market analysis. And you guys, that's 100% free. But this is what the form looks like. We're gonna get is obviously the address. We're gonna do a one-year comp review. We're gonna get the purchase price, the size, and the taxes, and then we're gonna work this form up. I've kept us in this small little box of Kingwood so that I can continue to teach you in the same housing market, and I can't really switch narratives. So we're gonna look at this house right here, which is for sale for $265,000. Now, right away, you're gonna immediately notice that the price per square foot here is less than $85 a square foot. There is a recent price cut of $30,000, and this home has been on the market for 88 days. The first thing I'm doing, I'm looking at the condition of the house, because remember, we're working with gross numbers. After expenses and stuff of that nature, then it becomes a net, but this house may be a little bit of renovation. I'm gonna note the size of the house, which is 3,120. I'm gonna notate the purchase price, which is 265,000, and then I only wanna look at comparable data or sold homes in the subject property subdivision. Now, I also wanna make sure to get the property taxes, and again, this is Houston, so you know we have a massive problem out here in Houston. So when I go to the property taxes, you guys will notice, again, this is for sale for 265,000, but it's being taxed as if it was worth 340,000 or 339,000. Now, the total amount of taxes on this property, shockingly, is almost $8,000, so that's all of the data that I'm gonna take. I come back to this subdivision analysis form. I put the subdivision, which is Woodspring Forest. I'm gonna do a one-year comp review. I'm gonna buy the house. I'm doing five years. I'm gonna do as much data review as possible. Put the subject property's address. I put the purchase price of 265, the size of the house, which is gonna be important, and I put the property tax here, which is gonna be important because we're also gonna figure out cash flow today. Once I have the market value of price per square foot for homes for sale and for rent, then I'm done. I can just do the math and figure out whether or not this is a good deal. In order to do that, I have to review homes that have already sold in that subdivision over the last one year. So I remove active status on listings. I switch to sold. I'm gonna go 365 days, which is one year, and then I'm gonna slide down here. I'm gonna lock this down to the subdivision, which is right here. So now I'm only gonna be looking at homes that sold inside that subdivision to try to get an idea of what homes are selling for over the last year. I look at the results right here, but I'm not gonna take every single home as a comparable. I'm only gonna use the homes that are fairly close to the size of the subject property, which is about 3,200 square feet. So what I'm gonna do is I'm gonna take number eight, nine, 10, 11, 12, 13, and 14. Now, if I didn't have this server, what I would do is I would essentially just add all of the price per square foot together, and then I would divide that by seven. But because I have this service and I pay the subscription, I can just have the system automatically calculate price per square foot for us, which is 104.96. So that's really important to know that because now I can start figuring out wedge. I have the market value, or at least over the last year, because remember, is it really the market value if the market's going down? So you gotta put things in perspective. But what we can say is over the last year, homes that are similar size as this home in this neighborhood sold for an average of $104.96. But now I need to figure out what is the rent price per square foot, and the way I do that is the exact same way that I showed you guys sold homes. But instead of sold homes, it's rented homes. I'm accessing the rental section of the service now, and I'm going again to sold. I'm removing active. I'm looking at the last year, 365 days. I'm locking it down to the subdivision, and then we're gonna see how many homes actually rented over the last year in that subdivision, which as you can see on the bottom left is actually 17. When I go to the results, I'm going to, again, categorize this by size because I only wanna select homes that are within about 500 square feet. So it's pretty much the bottom four. So I'm gonna select all four of those homes. I'm going to see what the average is now by going tabular, which gives us 84 cents per square foot. So I have almost all the information I need now to start doing the math. So I put 84 cents a square foot there. Let's calculate what the gross wedge is now because I have all the information I need for that part, and then we're gonna figure out what the cash flow is. So all I do, guys, is I take the size of the house, 3,120, times the market price per square foot, which is 104.96, gives me 327, 475. Then I subtract the sales price, which is 265, which is gonna give me my gross wedge, which is $62,000. I divide that into the market value, which is 327-ish, gives me 19% in wedge. So I go down here and I put 19% wedge at 62K. And I'm gonna tell you guys right now, I need 25 minimum in wedge, minimum 25. This one has 19. Let's figure out what the cash flow might be. We have one box missing, which is the estimated payment. And I'm gonna show you guys exactly how to do that. All I have to do is go to a mortgage calculator. I use this one on calculator.net. I put in the home price of 265,000. You see that here. I put a 10% down payment over 30 years. I got today's interest rates at 6.22% because that's what it says interest rates are today. We already got the property taxes. Do you see there's a method to the madness? So I put the property taxes, which by the way, real quick, once I purchased this house, if I were to purchase this house, I will eventually be able to get property tax down because I'll show them, hey, I bought it for 265. It's not worth 335, okay? That process is gonna probably take about a year for my escrow and my mortgage to be impacted. So I'm gonna use the raw amount and I put homeowners insurance about $2,800. PMI, I got 0.55, which gives me a total monthly payment of $2,481. I come back to the form, I put $2,481. Once again, I take three, the size of the property, 3,120 times the price per square foot to rent out, which is 84 cents a square foot, gives me gross rent of 2,620. So now I reduce the mortgage payment that we just figured out, which is, by the way, it's an estimate and it's not for you, okay? Not a financial advisor, but this gives me gross cashflow of $139. And I want you to comment below and tell me whether or not this deal is good enough for you. It does have a little bit of cashflow, right? Less than 10%. It does have a little bit of wedge, less than 20%. Tell me what market you're in and tell me if these types of stats that you see on your screen, something that you're looking for. So I really wanna know, comment below, and then also let me know whether or not everything that I just showed you was helpful. In conclusion, I want you guys to go back to my website and I want you to take this class right here, Home Buying Masterclass. I made that for you. If you take that class, you're gonna be better than 99% of realtors and loan officers. I am both a loan officer and a realtor and an instructor in real estate. I put all of my soul into that course. It is free for you because I want you guys to do extremely well out there. And other than that, guys, don't forget to like this video, share the video, and comment on the video, and happy Tuesday. I hope you guys do well today and throughout the remaining part of the week. I love you. You're important. Never let go of hope. And if you're out there investing in real estate, you guys already know we wish you luck and we hope you win.