 I want to dive into JP Morgan, what their forecast is here for affordability, getting back. They have it pinpointed here for how many years it's going to take for the market to get back to where the average American can afford a home. I find it extremely interesting. I also want to talk about Redfin data. I want to show you a chart that illustrates where the market picks up January 1st. This is the deadest moment that you're going to see in a long, long, long time. Even next winter is not going to be like this at all. Every fall, every winter, we see a downside. We see prices soften. We see days in the market go up. We see inventory pick up every single year. Even 2021, the year of the boom, we saw this happen. But next year is not going to be as bad as this year. So I want you to realize that this is the moment right here. And after January 1st, things are really going to pick up. I want to get in. Again, I want to show you the chart on Redfin with the increase of sales activity January 1st because I think that's what's very exciting for us as real estate agents to get out there and really build our business now, go all in, expand our footprint, and really get ready because this is the calm before the storm, ladies and gentlemen, 2024 is going to be your year. Also I'm doing a 2024 goal setting session next Friday, Friday, 3 p.m. central, 4 p.m. eastern. Text me 251-312-8844 to make sure you're getting my text messages so you can get the link for that. So you can be there for that. When will the crisis and the U.S. housing affordability end and how? Now I thought this was extremely interesting by JP Morgan. I read this and I thought, man, they really hit the nail on the head, in my opinion. Let me blow this up and share with you guys this because this really kind of lays it out for me. We think rising incomes can break the U.S. housing market's log jam nationally in about three to five years, but for large cities we see an average over the next five years. Here's why. So this is interesting. They lay it out. They're not talking about prices coming down. They're not talking about interest rates coming down. They're talking about it's going to be a little bit of interest rates but mostly going to be time going by and wages increasing over the next couple of years to catch up with where housing affordability is. The first good news, the United States hasn't plunged into a recession. Despite more than a year of interest rates, the economy has shown resilience beyond most economic predictions, but the Federal Reserve still hasn't beaten down inflation completely and the economy's strength could be more long term than a phase of the economic cycle. Many market participants now believe interest rates will stay higher for longer and this has prolonged a set of tough challenges in the housing market that have almost put it into a state of suspended animation. The difficulties, and this lays it out right here for anybody wondering. The U.S. home prices are currently at all-time highs. We just had an all-time high. We just got the sales report and we're at all-time high for October and less affordability relative to income and mortgage rates than at the height of 2006, housing bubble. Less affordable than 2006. That's when the housing bubble was at its peak. That's after prices skyrocketed about 40% during the pandemic. Sales of existing homes are very depressed down to 2008 levels as bad as after the financial global crisis, yes. While buyers wait for prices to fall, sellers won't list their homes because they don't want to sacrifice the low mortgage rates. They locked in before the fastest, most aggressive rate-hiking cycle in 40 years. Prices aren't falling because the market is stuck. Demand has been reduced by high mortgage rates, but supply is even more restricted because of the severe underbuilding in the 2010s relative to population growth. So they're blaming a lot of this on the underbuilding, under construction, lack of supply. They say, you know, there's studies and I want to dig deeper into this and I'll do a video when I really find the answer. People say that we're five to six million units short in the US, OK? I believe that could be true, but I want to know how they came up with that and what data they're actually looking at. How do we, how does these issues get resolved and when, OK? Rising incomes can restore affordability given enough time. First, here's how we don't think the crisis will be resolved through a crash in a home prices. So JPMorgan does not believe that this crisis of unaffordability is going to get resolved by home prices coming down or some kind of crash. A lot of people have it in their head, oh, well, the market has to crash. Home prices have to crash for this thing to straighten itself out. No, I've been talking about this for a while. Wages will continue to increase. That will be a factor. I actually learned that from my friend, Barry Habib. Um, dude's a genius when it comes to this and, you know, with affordability, with wages increasing every year, that's going to play a big part in us getting back to a normal affordability when it comes to housing. Um, let me do where I were. OK, the perhaps natural assumption is that the housing market can only return to a more normal state of affordability and predictable price appreciation after a drop in home prices effectively clears the market and it begins a new cycle. This is certainly not an impossibility, but that would likely require a U.S. recession and a spike in job losses across the economy, neither of which are our base case for the coming years. JPMorgan does not believe we're going to see a U.S. recession of any magnitude or a spike in job losses. Nor do we think lower mortgage rates are the solution to clearing the log jam. Indeed, surveys of home buyers find consistently that financing rates aren't their main motivators when they make a purchase. Life stages are people buy homes when they get married or when they need to move as they find employment, have children or retire. We see another pathway that doesn't involve punishing price declines or sizable drop in mortgage rates. It hinges on how home affordability, housing affordability could be restored by incomes continuing to rise at a robust rate. We think that the path to affordability for starter homes as well as the luxury market is that wages rise to catch up and meet the higher cost. OK, wages increasing to catch up with the higher cost. When will a home be affordable again? How long might it take to restore average levels of affordability based on historical ratios of home prices to income and factoring in mortgage rates if incomes were to keep growing at the recent pace? OK, they're not even trying to like predict that incomes are going to rise even faster and what they're growing right now. OK. So based how long will it take to restore average levels of affordability for homes if incomes were to keep growing at a recent at the recent pace? Mortgage rates didn't decline and home value stayed at all time highs. OK, so all they're saying is, is that that if mortgage rates stay the same, home prices stay the same and income continue to grow at the pace it's growing right now, how long would it take to get back to home housing affordability? All right, their answer 3.5 years. So they're talking about 3.5 years. What would that be? 23, 24, 25, 26, so mid 27. If everything stayed the same, I think the problem there is, is that prices will continue to rise, but mortgage rights will come down. So hopefully that'll balance out and you add in incomes rising, household incomes, then we should be in good shape over time. It's going to take time. Our analysts of the timing is notably sensitive to mortgage rates. If the market price, market's pricing of mortgage rates were to fall by just 1%, US homes could be affordable again in just two years. But that's assuming that prices stay the same, I'm sure. I'm sure that they're saying if prices stay the same, if mortgage rates come down a percent and incomes continue to grow like they're growing now, then we've got two years. I think even if mortgage rates come down, prices will adjust for that upward. We're still going to be looking at 3 to 5 years when it comes to housing affordability based on incomes rising. Based on the current trends, housing affordability can be restored in 3 to 5 years. So this chart here shows this dotted line here in the middle is the 1991 to 2006 average. Okay, and that's kind of where you want to be. You want to be around this dotted line here. Okay, and this big dark blue line, that is the housing affordability index. And you see we're at an all-time low down here. Like this is as bad as it's been. Here's where we're in 2006, and here's where we are now. And they think over time, getting to 2027, we're going to slowly come back to here. And you kind of see their prediction that it's not going to get any worse. And I agree with that, right? It can't get any worse because people just can't afford. They're just going to just stop. They're just going to stay where there are. They're going to live with their mom. They're going to get roommates, whatever. And that entire situation is just going to continue because you can't go any lower. I'm sure you guys would all agree that you can't get any lower. I also agree with JP Morgan that home prices aren't going to, you know, deep that the answer isn't home prices crash. I think the answer is time. Time goes by and affordability gets better through rising incomes, household income and mortgage rates slowly coming down. I also think prices will continue to increase. Let's see. And then home prices vary by metro area. So they get into some locality stuff right here. We'll see. We see. And this is kind of a mixed bag, right? And this is how the market always is. You've got the markets that are, you know, doing, you know, better than others. And that gets you to the national average. Redfin put out some data. Matter of fact, let me find that. Let's see. Let me find that really quickly for you. Let's see. Let me find that. I want to share that with you really quickly. And then I want to move on to some more data. Redfin, redfin, redfin, redfin. OK, let's see. OK, so. So that this was the highest share of home price drops. No, no, no, that's not what I wanted. Let's see. OK, here here was the home. So let me blow this up a little bit. We're home sale prices decrease the most. North Port, Florida, 8%, Austin, Texas, 7%, Honolulu, 4%, New Orleans, 4%, San Antonio, 3%, Fort Worth, Texas, 3%, Tampa Bay, Tampa, Florida, 7%, Jacksonville, 1, Cape Coral, Florida, 1, Boise, Idaho, 1%. This, these are where home sales, home sale prices, OK, where home sale prices decreased the most. OK, so in a year where, where mortgage rates went way up and you've got everybody on YouTube saying the market's going to crash and burn. Isn't it crazy, guys, by the way? Isn't it insane the amount of hate the market has gotten this year? Like prices are going to just crash and burn. And you've got all these fear mongers. You got all these people on YouTube doing videos like the market's going to crash tomorrow. The market's going to crash tomorrow. It's, it's crazy. It's insane. Um, but here we are. These are the worst places. 8% North Port, Florida, 7% Austin. These are the worst places. Now we talk about national average. Listen, there's always going to be houses every single year. There's going to be markets where prices are down for the year. And there's going to be places where, where prices are up for the year every single year. And that's how you come up with the national average. And here we see where prices increase the most. Lake County, Illinois, 16%, Newark, New Jersey, 15%, Camden, New Jersey, 14%, Hartford, Connecticut, 13%, New Haven, Connecticut, 13%, Anaheim, 12%, San Jose, 11%, Knoxville, 11%, West Palm Beach, 11%, Cincinnati, Ohio, 10%. So you've got, uh, you know, markets that are down, markets that are up. Okay. You know, but back to this article here. JP Morgan, uh, just want to kind of, you know, summarize this up. I thought this was very interesting. It's what I've been thinking about the entire time this has been happened over the last, last two years. Let's just say that this whole thing is going to get solved by household incomes increasing, the market leveling out a bit still increasing, but slightly not seeing the double digit increases on prices and mortgage rates coming down a tad. That's how all of this is going to get solved. So just remember guys, time heals all wounds and that's going to be true with the market as well. We're going to be just fine. I want to dive over to the Redfin data here, um, because I want to show you guys, just in case you haven't seen, I want you to understand the way that the market behaves every single year here. So let's first look at home sold. All right. Every single year you see this decrease. You see this decrease? All right. It's coming down. Okay. And it always comes down to about the end of January. And then guess what? It starts spiking up. It starts spiking up and it always peaks out about mid-year and then it kind of dwindles down even 2021. Right? The year of the boom, guys. It did the same thing. It peaked out mid-year and it dwindled down even in the year of the boom, guys. Okay. You know, well, it didn't happen in Miami. It didn't happen in New York. Yeah, it did. I can show you. I could go in here and show you the data, real data. You're just going by feel and I'm going by numbers. But this is home sales. So we have to realize about home sales is these are closed deals. So right here, closed deals started happening, right? Towards the 1st of February, the first couple of weeks of February, which means what? Which means that the homes that closed went pending 30 days or so before that, which is what? January 1st. January 1st, guys. This is my target right here. Let's look at pending. So you see pending, you do have a slight decrease there right at the beginning, but then it picks up really soon. It picks up like the first week or so of January. Okay. Again, let's look at home sales. You see it's down and it doesn't spike back up, you know, till like late January, early February. Same thing with pending deals. It kind of starts, but you see it picks up about 30 days before the home sales start spiking, home sales spiking, pending deals spiking. The pending deals are the ones that are closing at the end of February. You see, we start out and it's kind of slow right then. Okay. This is national, of course. You can dig into your local data, but this is what I'm trying to tell you guys. All right. This is what I want you to get out of this. And then we'll move on to some more forecasting and stuff. Sales are going to pick up incredibly after the first of the year. Don't let this market fool you. If this is your first time around with the market cycle and things getting really slow, don't worry about it. You need to go all in. I mean, all in talking to as many people as you can. Go all into your marketing. Go all into your phone calls. Go all into your weekly email. Go all in on everything you do. The handwritten notes, everything. I want you to go all in on everything to just try to talk to as many people as you can. If you're sitting around in the office staring at a computer and you're not doing anything to try to communicate with people at scale to try to build your business, because two things happen when you do that. You build your database, which is basically loading up for after the first of the year when the market rebounds. You're going to be crushing it. The bigger you can get right now with your database. The second thing that's going to happen is you're going to squeeze a couple of deals out. Just as a byproduct of trying to build your database, you're going to squeeze a couple of deals out during the month of November, December. You're going to squeeze a couple of deals out that's going to kind of keep you afloat. But if you sit around saying, oh, the market's slow. I'm not going to do anything. What's the worry? Well, what's the, what does it matter? Nothing's going to happen. The market's slow, you know, blah, blah, blah. Then you ain't going to do nothing. You're not going to, your business isn't going to double next year. This is the moment right here that you double your business. Your business isn't going to double next year. Nor are you going to do any deals today because you're just saying, oh, well, nobody's doing anything. So why should I do anything? Okay. That's, that's how low producers think. Okay. Are you a low producer? Because that's how low producers think. Now let's move over. Let's see what else I got. We talked about new home applications, you know, builders are suffering. Okay. We talked about JP Morgan and when affordability is going to get better in the country and I stand by this, I, you know, like forecasting things and trying to predict things is what the grain of salt. I mean, none of this matters, right? What's going to happen is going to happen. It's normally going to be way different than what anybody predicts. That has been proven time after time after time after time. But when you think about the timeline of this and they're not giving you the quantum leap here, oh, it's going to be better next year. They're saying three to five years here. This is to me, the most realistic forecast that I've seen concerning this. And back in 2008, when I got back in real estate from going homeless and everything and I, you know, ended up crushing it, it was because I looked at the market and I realized, this is crazy, where the market was going to be in the next three years. It's funny they say three and a half years because as an agent coming back, learning what I learned, I looked at the market over a three-year period and I said, okay, foreclosures are just rampant. There's so many of them. I don't want to be a foreclosure agent because I'm basically the bank's bitch. I'm going to go out here and represent people that buy these foreclosures and create lifelong relationship with those clients. And then in three years, when market comes back, prices go up, they're going to sell that property for a profit, buy something else. There's three deals from that person. We're firming three or four people. There's three or four more deals. And then those people will buy and sell with me for the rest of my career. And that's exactly what happened. So I looked at it over a three to five-year outcome and I said, here's where the market's going to be. Let me put myself in position to crush it then. And by 2014, I was selling 100 properties a year. This is your 2008. You can visualize where this is going to be over the next three years, right? We're going to get back to affordability. Household incomes are going to increase. Prices are going to stay pretty level. Mortgage rates are going to ease down. I don't think we're going to see this big drop where it just makes the market explode. But I think we will see some markets that start to see some multiple offers. We're already seeing multiple offers come back in some markets, just because of the little half a percent drop on mortgage rates. This is a very, very good article. All right. NAR, Lawrence Yoon, you know, is 18% home sales by year over year. All right. He's optimistic. He's predicting 6% to 7% mortgage rates by spring. Now, it's hard to predict mortgage rates. I mean, it is hard. A lot of mortgage people said that by the end of this year, mortgage rates would be around 5%. All the big mortgage people, even Barry Habib, said mortgage rates were going to get down in the fives by the end of the year. We ain't even close. They ain't even touch 5. Now, we're near 5%. Now, the one thing that all these people were correct on were that transactions would be down and home prices would be up, and they definitely wouldn't crash. That's one thing that they were correct on. So, it can't be right on everything. But, you know, all right. So, we talked about this and how I need you to be 100% pre-paired to go out here and absolutely crush it. And the only way to do that is to build your debt. Go to the moon with your database right this second, okay? Because here's pending. It always happens every year. Every single year, guys, this is going to shoot up. And this year is going to be crazier than ever. And then home sales, it takes some time. It's a delayed reaction because these are the closed sales from the pending deals that start closing. Ching, Ching, Ching, Ching, Ching, Ching. It's going to happen every single year. You better be on your grind right now, ladies and gentlemen, not thinking about poor me in the market. You need to be thanking your lucky stars that the market is the way it is right this second. All right? I'm doing my 2024 business planning session. It's going to be live. Just text to me at this number if you want the link. It's 251-312-8844. 251-312-8844. Let me know what you think in the comments. I love you guys so much. I'm going to be live next week. Let me tell you what I want to be live doing. I'm going to be here giving you the new home sales report. That's Monday. Kay Schiller's coming out with their monthly report Tuesday. And we have pending home sales next Thursday. Those will all be live reports right here with me, Ricky Karuth, on YouTube. And I'll see you guys on the next video. Let's get it.