 Ooh, here we go, guys. What time of year is it, the fall? Yes, and what happens every fall in the US housing market? Every single year, we see prices soften. We see new listings shoot up. We see active listings rise. We see days on the market go up every single fall, even in 2021, the year of the boom. And this fall is no different. It's hitting a little different. It's hitting a little different because of the 8% rates. But we see new home sales that the median prices of new construction went down quite a bit just from August to September. I want to talk about why, because it's not as simple as just the builders are reducing prices to get sales. That has a little bit to do with it, but it's not the entire equation for the median home prices. I also want to dive into Goldman Sachs and their forecast of home prices through 2026. Here's a graph right here. It's very interesting and we can even dig into the article a little bit here and some of the comments at the bottom of the article. But I'm here to tell you before I dive into this content that if you are a home buyer, you should be looking at this saying, OK, now's the time because when you go buy a new construction home, number one, prices are down. Number two, you're getting buy downs. These builders are buying down the rate and you get a much, much lower interest rate than you can get right now on the open market in the conventional loan, buying an existing mortgage unless that seller buys the rate down or unless you buy it down. But these builders are buying the rates down for you. That's why their sales are up 33% year over year because they're really the only game in town. They've got inventory. It's brand new. They're going to buy the rate down. Why not? They're paying some closing costs. They're giving us some more concessions. They're putting blinds in. They're putting appliances in. Of course we're going to jump on that deal. You get a better rate. You get a nice house and we're ready to roll. Don't have a lot of maintenance for the first five years. Everything's brand new. It's all under warranty. Of course. So if you're a home buyer and you're thinking, oh, when should I get into the market? You know, I can afford it, but you know, I'm just kind of scared to kind of get in because of interest rates and, you know, I don't know what's going to happen with the market. Now's a good time to get in there when prices are taking this hit during the fall. Go talk to your local real estate agent. Go talk to your local builder. Go to the communities, the brand new construction homes that you like that you've had your eyes on and go in there and negotiate some stuff. If you're looking to buy a home. Now, if you're a real estate agent, the same thing, you should be targeting these. I've been selling new construction homes left and right. I bought five of them here right within a couple of miles of my house. I bought five of them, four bedrooms in the three, 20 to three, 50 range on some of them are on a lake. Uh, some of them ran a new school district where they're building new high school. Uh, these are money makers cash flowing. My payments are about 1800. I'm running them out for 2400. These are cash flowing. And so if you're an agent, you should be saying, thinking the same thing. Let me target these new construction homes because that's where the buyers are going right now. Why aren't you selling these new construction homes? And listen, about a third of the sales out there right now, all total sales are cash deals. All right. Um, there's a good 20, 25% new construction. Okay. So you got 50% let's just say of total sales that are cash deals, no mortgages and new construction homes. There's plenty of stuff going on out there. Guys, you just got to get up and go get it. Talk to people, see what you can do to help them build your footprint, expand your influence in the market. But if you're a home buyer, now's a time to get real serious about jumping in. Oh, well, if home prices are coming down now, they're going to continue to go down. Yeah, they might continue to go down a little bit, you know, but how far, not that far. Why? Because there is demand this time of year. It slows down, but guess what? It picks back up. It does it every year slows down, picks back up, slows down, picks back up. Don't get caught waiting too long. That's the problem that I'm going to see a lot of you guys run into. You know, listen, oh, Rick, you just, you always are telling people to buy now, buy now, buy now. Okay. Don't buy. I don't care if you buy or not. It doesn't matter to me if you buy. I'm buying about five of them brand new. I bought another existing one about six in the last 90 days. I'm not saying buy, you can buy, you can not buy. It doesn't matter to me. What you don't, doesn't affect me at all whatsoever. What does affect me is the fact that I'm buying houses right now. And so my network, my net worth is going and it's going to continue to do so, especially after you see this Goldman Sachs report. Let's talk about these new home sales. All right. Let me, all right. New home sales rise despite affordability headwinds. Okay. New, the, the median sales price for new homes in September was $418,800. That's down from $430,300 in August. So just in 30 days, we see this drop from 430 ish to 418, about a $12,500. So our 11,500 dollar drop. Okay. And 30 days. That's very significant, but it's not just builders reducing prices to keep sales going. And this is another reason why, and we talked about this on the episode with Logan from HousingWire. They actually, you know, those guys wrote this article, we talked about the fact that builders do control inventory of their, of their supply. They're not just going to build like crazy just because they, they can, because they just want to make all the money. And, you know, the demand is there. No, they don't want to get caught with their pants down. They're controlling inventory to control price. Now, right here, this is great evidence right here of that happening. Price is coming down. They're having to throw in concessions and reduce price a little to keep sales going. Of course, they're probably seeing and they're saying, oh, I'm glad we didn't just, you know, go to the moon with this and just start building, you know, way more homes than we really should have. No, they're controlling it exactly the way that a smart business person would control that inventory. Let's dive in here to a little bit of the data. A new home sales figure expected, let me raise the go, expected projections in September, despite mortgage rates at 23 year highs, declining mortgage applications and waning builder confidence. In September, sales pace of new homes picked up considerably, okay? Picked up in September considerably up 12.3% compared to August, August's revised rate of 676,000 homes to be sold, new construction homes. That's the yearly projection based on the sales in August, 676,000 homes. The new home sales in September reached a seasonal adjusted annual rate of 759,000. So big jump, 12.3%. So sales jumped in August, but price is down. This is according to data published on Wednesday by the U.S. Census Bureau and the Department of Housing and Urban Development, HUD. On a year-over-year basis, new home sales were up 33.9%. Now, why do you think that is? Well, existing homes aren't existing anymore on the market anyway, and builders are able to offer these buy downs, and so they're going to keep that product moving. According to our editor here, Chairman of the National Association of Home Builders, the lack of existing inventory is the reason why more home builders turn to new construction. Home buyers turn to new construction. However, she expects housing market to slow in the coming months as affordability headwinds persist. Higher interest rates not only raise the cost of housing for buyers, but for builders as well, because of the increased cost for financing construction loans. So financing construction loans, okay, that's, you know, the interest rates also are affecting the cost for financing the construction loans to build these homes. Meanwhile, the median sales price for new house in September was $418,800 down 3.3% from August median price, $430,300. And this difficult housing market, many builders are making adjustments to boost their sales according to the National Association of Home Builders. And in an October survey, the association found that 32% of builders reported cutting home prices while 62% of the builders provided sell incentives. Okay, 32 reported cutting home prices. The shift towards building smaller homes also influences the downward trajectory of home prices. Okay. And that was noted in the statement. So understand that it's not just the builders saying, oh, they're not freaking out like, oh, you know, we got to slash these prices. No, they're also building smaller houses that cost less. That affects the median sales price. So I don't want you to sit here and think, oh, the guy's on YouTube that's talking about the market's crashing. Here it comes. No, it's not just builders freaking out and cutting prices. They're also building smaller homes to try to combat the affordability issues that we're running into here. Additionally, home builders are building more affordable homes, according to the Holden Lewis home expert at a nerd wallet. What a name, nerd wallet. In fact, in September, 44% of new properties were priced under 400,000 compared to 32% a year earlier. So 44% of new properties were priced under 400,000. And that was 32% a year earlier. So a lot more homes priced under 400,000. Well, how do they do that with, you know, higher, you know, material costs and higher interest rates on the construction loans and all that? How is this happening? It's happening because they're building smaller homes, more affordable homes and they're not maybe not putting as many extras into the homes. New single family home inventory remained healthy in September with 435,000 homes available representing a 6.9 months of inventory at the current sales pace. It's down 5.4% from a year ago. So 6.9, let's say seven months of inventory of new construction at the current sales pace. And that's down 5%. So the inventory of new homes is down. Okay. And it's at seven months of inventory, which is a lot more than existing home sales. This is actually a chart of where Goldman Sachs expects U.S. home prices to go through 2026. Okay. I hope you can see this, but this is what this was the run up from the pandemic right here. You see the correction that we went through, you know, through, you know, mid 2022 to, you know, January of February or so before prices picked back up, we had a little bit of spurt and it kind of, you know, well, it actually shows a spurt up and then maybe a slight down, which that's going to be through next year. They're basically calling for it to be even. So if you look at what they're actually saying, Goldman just dropped a housing market forecast for 2024 and it seems, and it sees high home prices, higher, high mortgage rates and the lowest number of existing home sales in nearly since the 90s. Looking ahead, Goldman Sachs forecast model predicts a very faint increase in U.S. homes prices is measured by K. Schiller. 1.3% in 2023 followed by 1.7% in 2024. 2.4% in 2025 and 3.8% in 2000. Well, they said 2025 twice. They meant 2026 right here as a typo and 3.8 in 2026. Right. And to put this into perspective, the annual growth rate of U.S. home prices since 76 has been 5.5%, including an unprecedented surge of 19% in 2021. So Goldman and K. Schiller, they feel like we're going to have a positive year every year. Appreciation 1% this year, you know, 1.7 next year, 2.4 the next year, 3.8 the next year. So slow, steady growth, right? And as far as home sales go, they're calling for a really slow year next year, 3.8 million sales, you know, which would be slower than this year, slower than 2008. Now let's dive into some of these comments. AGC article this year, 65,000 homes purchased in Metro Atlanta by investment firms and turned into rental properties. I don't know, maybe 4.4% of Atlanta owned by corporations. It's around 1.3% nationwide on average. We can agree it's a drop in the sea. Time for the Fed to step in and ban these greedy parasites before we're a national renters who pay ridiculously high rents of these blood suckers until the day we die. No one will be able to own or retire. It's a national crisis in the making and it's happening now. Jeff Bezos is behind much of it and has such deep pockets it will take an act of Congress to stop him. Let's see what this says. If you dive into the agenda 2030 plan, it's actually their goal. So I doubt the government will step in to fight it. They want us to own nothing and pay rent or monthly for everything. Even look at how automated manufacturers are now making vehicle features able to be turned on and off monthly like seat heaters rather than purchase them are not at the beginning. You can opt for them to be or not to be month to month. Interesting. See, you're absolutely right. I've been saying this for a while and not only are they buying up everything. They're also calling a harassing people to sell them to their own. This is a big problem and the government needs to stop this kind of practices. You know, I wonder since we've got the trial happening with, you know, NAR and remax and kelo Williams and home services of America and real estate agents and, you know, home sellers and all that. I wonder if because there's so much public pushback and that's what's happening with this trial. There's a lot of pushback against, you know, the listing agent paying the buyer agent a commission. Why do you care, Mr. Seller, you hired me for five percent. Let me do my job. You know, if I bring the buyer, I get all the five. If I if I don't, you still only pay five. It's a good deal for you. I actually incentivize, you know, a lot of buyer's agents, thousands of them in the market to sell your house. Don't you like that? I would think you like that, but evidently, you don't evidently, you you just want to keep the three percent or the two percent or one percent or whatever you think you can keep and make the buyers be nonrepresented. It sounds like you don't care. You just don't care if the buyers are represented. But what about when you're a buyer? What then? Especially for your kids who become first time homebuyers who don't know what they're doing. They can't afford an agent. What then? What do you what kind of justice are you doing for them? But kind of got off subject. What I'm saying is that all the public pushback there with people that are pushing that don't even realize how good of the system it is. I wonder if we'll see this in court, where you know, people people are going to take, you know, what if a class action suit happened against the institutional owners who were rents just went up to the roof and the public says, this isn't fair. I'm going to sue you. You shouldn't have been charging me that much rent. You know, could that be a case? Sounds like it's the same tone when I hear people talking about it in public on these forums and stuff. It has the same tonality as people who think 6 percent commissions are scam. It has the same tone. So I'm wondering if that maybe that one day that's going to be a one day that's going to be a suit. This guy's basically saying the same thing. Stop funds, corporations, anything of the such from buying single family homes. People cannot compete with funds. Since two thousand twenty one prices went up a hundred percent and more. And they never went down in price because two thousand twenty one funds corporations and investors are buying thousands of single family homes increase in home prices, creating inflation and decreasing houses inventory. Rapid increase in home price is very bad for local commodities because it has a negative effect on local businesses and causes inflation. When living expenses show up to cross go up, businesses need to pay higher wages to compensate for the rent, the higher the cost of living. This caused business then raised their price to stay profitable. Moreover, the ultimate effect is a decrease in consumers ability to produce goods and services. If the situation continues to bubble or does not improve, we can eventually cause a death spiral for all businesses. Everything comes down to what the consumer can afford to spend without strong consumers. You cannot have a vibrant economy. Eventually the funds with their greedy investment mantras will kill capitalism. You will then have the United Funds of America was negative returns for all investors. Do listen when it gets to that point. When it gets to that point, you know, rents will go down if people can't afford it, the whole economy collapsed. And that's what you're saying, but it's not like the end of the world. Right. And I agree, by the way, guys, I agree, you know, don't let them buy up every single little house out there. Do something. You know, but what are you going to do? Let me know your thoughts in the comments on all this. Investors owning homes, you know, the corporations, the funds, the, you know, even the mom, Paul small investors, I just told you at the beginning of this video, I bought five new construction homes as rental properties. I own, I only know how many 40. And I can, I plan on buying more. My goal is to get to 100. I'm in the middle of building 41 a unit apartment complex right now. I'm developing it myself. You know, I mean, isn't it the American dream to build businesses and, you know, own assets that produce income? That's the entire American dream. So get out there and be one of them. You know, don't sit on the sidelines and cry about them. You know, get in the game and be one of them. That's my advice. But let me know what you think in the comments. Why no discussion of the effect of possible increased unemployment. Higher rates have many companies hanging on by their fingernails. Higher unemployment may be the result of forcing home cells. Kind of a narrow study. Let's see what the comments were. Unlike 2008, 2010, there was also large increase in rents. In 2020 to 21, most homeowners, especially ones with low mortgage rates, can profitably rent out their homes. Personally, my mortgage payment is $3,000, but my house can rent for about $4,500. I'll never sell. I'll become a landlord before I give up my 2.625 percent mortgage. Let's see. Oh, Robert replied. Let's see. Sounds great. But God forbid someone in your situation got terminally ill or lost a job or got transferred a thousand miles away or even got a divorce. A sell might happen. Never say never. Sure, a sell could happen. Right. He's not saying like never. All right. Not saying never. He's not like never. Like, yeah, like something crazy could happen. But he's saying, Robert, like if he loses his job, which is what you're talking about, you're talking about unemployment and houses being forced to sell. What what Brian here is saying is that if that were to happen and he lost his job, he didn't have to foreclose, he can rent the house out and make fifteen hundred dollars a month. So he can just, you know, move in with mom and dad, you know, find another place to rent. You can do a lot of different things there. So you see there's cushion here. There's a lot of cushion with equity. People could just sell their house and make a lot of money. Even the prices go down 20 percent. Most everybody is good because they bought their house a long time ago. You know, there were six million cells in twenty one. There were five million cells in twenty two. There's four million cells now. So let's just take that whole thing because if you bought in twenty, you're ahead. Even if prices go down 20 percent, you're still good. So you got six million plus five million. That's eleven plus four. That's fifteen million. So fifteen million people bought basically pre-pandemic during the rush. OK, fifteen million. There's a hundred million homes in the country. You got fifteen million that bought during this run up. OK, and they're still all positive right now. They're still all positive right now unless you bought like a five million dollar home. There's certain sectors of the market that is not what it was, of course, with rates the way they are. People want to get the best deal possible. Absolutely. But we're talking about medium prices, average prices around those price points. You're doing better than you were even last year. Prices are up four percent right now. Year over year, it's all local. Depends on where you are, but that's the national numbers were up on the year. Let's see. My next door neighbor did get transferred across the country there. He says, yeah, my next door neighbor got got transferred across the country. They're renting their house out. Exactly what you said got trained. You know, Robert said, what if you get transferred a thousand miles away? Well, my neighbor did and they're renting their house out. Big deal. You can rent your house, Robert. No matter where you are in the country, you could live in another state and still rent your house out. You don't have to. You don't have to sell it just because you you get you get transferred somewhere. And Catherine here chimes in. How often are those things happen? Losing a job, they'd actually gain income by renting their house for far more than the mortgage. Boom. The problem with this idea and I'm sure D Boyd is talking about, you know, the prices going up every year, whatever, like Goldman's, you know, forecasting here. The problem with this idea is that you can't you cannot rent a place for less than the mortgage you paid five years ago. So the people with low mortgage payments will stay put as history has proven rent may go down a little, but we'll never crash. And that is something I agree with. If rent comes down, rent could come down, which we were already seeing rent come down some, but it's not going to crash and it's not going to come down a whole lot. It's going to come down, settle out. It went up so much and then we're going to keep trucking. Like let's take the homes I just bought just bought them in the last 90 days. Payments are 18. Rent is 24. They're all rented out. If rent goes down what 20 percent? What's that going to be five hundred bucks? I'm still cash flowing. It's not a lot, but it's still cash flowing. And guess what? Whatever it comes down to is the new floor. And then what's it going to do from there? It's going to trickle up to three percent a year. I'm still good, right? So I had all that figured into my business plan. The jobs outlook is still strong, typically unemployment increases as output decreases in the aggregate. This has not occurred. One thing may have espoused the possibility of stagflation, which is high inflation, high unemployment and stagnant demand. This is not the case yet either. It's likely Goldman Sachs's housing model used such data points as input. Otherwise, you infer its model and would be useless. Well said, their death spiral. Robert, here comes Robert. I've seen homes in my area that sold for a premium two thousand two and one are now back on the market for less than that purchase price. This will become common in months to come with the increases of mass layoffs. Dude, I just said in two thousand twenty one six million people bought out of the hundred million homes in the country. And, you know, how many of those people are going to going to run into a problem? So, I mean, if you know, I mean, it's almost like the Airbnb crash. You know, where's that? When's that going to happen? You know, we don't hear anything from the bubble boys about that one. There's a million Airbnb's in the country. You know, Airbnb income went to hell. They're all going to sell. It's going to crash the market. Not a single one of them have hit the markets. It's kind of the same thing. There's a lot of fans and maybe he's like he's talking about a job loss recession. You know how far we are away from a job loss recession? It's not even in the in the stratosphere right this second. You have if you think that's going to happen, which anything can happen. But if you if you think that's going to happen, you're really guessing. You're not looking at data and say it's just a gut feeling. Oh, there's got to be layoffs coming. There's not there's not any data that that implies that. Maybe I'm wrong. Maybe things change. There's no data currently. Here we go. There's no reason to mention it because it's unlikely there will be a significant rise in unemployment in 2024. Robert says historically dramatic rate increases bring higher unemployment. No reason to mention that. I think it's still naive. So here we go, Robert. What you're doing is is you're just taking the generalization and your gut feeling that, hey, if rates go up, that means that there has to be unemployment. Not true. That's not that's not correlated. Has it happened? Yes. Every time? No. Not at all. If big banks are expecting high home prices than expecting low home prices within the next 12 months. In 2008, big banks were telling everyone home prices will continue to rise. 2008, are you kidding me? Home prices started going down in 2005. I'm wondering about your your timing here, your memory. Totally different scenario playing out. You know, why is he wrong? I have to agree. Different reason. Most big banks are making windfall profits. GS is not going to do anything well. Not an institution whose financial price I would value. My first thought when I saw the headline was why in the world would anyone listen to Goldman Sachs about the housing market? And Robert says that's a sham. That's a shame. Just keeping the masses calm before the slaughter. Robert is a hater of the housing market. An absolute hater. The question is what will interest rates do? They answer that question. You may have to ask another question. What will happen to government spending? To answer that question is also certainly remain very high. Knowing that rates will not move down. And considering what most homes today. I'll have a two to three percent mortgage. Those people won't sell unless they absolutely have to. As far as higher unemployment I believe that overall employment will remain steady. Yes. Some businesses are struggling but the general the generational imbalance caused by the baby boomers and following generations will have over the overall effect of keeping employment steady. Remember the boomers have all the savings. Social security, Medicare and other investments that are in better shape than most. So they will continue to spend and consume and workers will be needed to meet those demands very well said. Very well said. Anyway it could go on and on here. You know at the end of the day is what it is. You've got home builders that drop their prices not necessarily because they drop there was some dropping but there was also a lot smaller you know a lot more smaller homes being built to try to combat with the affordability issues that we're experiencing. And I think that's a good thing. You've got Goldman Sachs who's predicting you know one to two even three percent increase in 2026. How do you predict 2026? Ain't no way. But it's interesting to see they haven't been too far off on their housing forecast in the past. And you know at the end of the day you know you look at other forecasts like Zillow and realtor.com and others. They're all calling for positive prices next year. Not big positive prices but you know in that two to three to four to five percent annual increase. That's what everyone is calling for. Forecasts will be taken with a grain of salt. At the end of the day it does not matter what prices do. If you buy today you get a buy down you get a new construction home. You're buying it to live there for 10 years. The average right now is people people are saying what people are saying is 16 years. That you're buying this home to live in it for 16 years. If that's the case what do you care what home prices do next year. If you can afford the notes why do you care what home prices do next year. Why does that matter if you want to wait and risk that home prices do go down and they don't go up then be my guess. Wait. That's fine. That's awesome. Good plan. If that's what you believe and that's what you think and that's what you want to do. Awesome. I'm not here to try to get you to do otherwise. But I'm saying home prices could go up. All the entities forecast that going up. Not saying it's going to happen but that's what it's looking like. If I had to put my money on it what would I put my money on. That's what you have to think about. But if you you know it's it's a risk. It's always a risk. Any time you buy a house it could go down any time. Not just right now. Any time. But if you buy it you can afford it. You get a buy down you love the house. You plan on staying there for five 10 15 years. Who cares what prices do next year and eventually rates will come down. And if you want to refinance it you can at that when the rates come down what are prices going to do. I'll let you answer in the comments. But when that happens guess what sell it. Upgrade to a nicer home at lower rates. You'll have a lot of options. Why. Because you own an asset you're not renting. Anyway I digress. I love you guys. Thank you so much. Leave your comments below and I'll see you on the next video.