 Oh my goodness, the housing market here seems like it's at a complete standstill. We've got housing market update from Redfin talking about 2023 on pace for the fewest home sales since 2008 as mortgage rates hit 8%. That's right. We're on track to hit 4 million transactions this year, which is what we did in 2008, which was the lowest year of the 2000s so far. So we're on track to be right at the lowest year, tying with the lowest year number of transactions in the country, although prices are still near all-time highs. But rent seems to be coming down. The rental market down slide, five straight months of falling rents, and a new report finds that it's now even cheaper to rent than to buy a home in nearly every major market. If you see this chart here from Redfin, it shows price drops for listings. These are percentage of active listings with price drops in all Redfin metro areas. You see the spike that's happening right now that is much sharper of a spike than in the previous two years. Later on, we're going to talk about this couple making over 100,000 a year who's just giving up on buying a house because of the crazy LA housing market. And they basically say it's impossible if you're not rich. And my question is, what is the definition of rich? But first, home listing skyrockets. Home listing skyrocket, but there's a catch. So let's dive into this. Home buyers are flocking, literally canceling contracts as listings see the biggest rise in months. But why are some buyers still backing out last minute? All right, so let's dive into this. In a promising development for hopeful homeowners, new listings surged by 1.4%. It's funny we use the word surged when we're talking about 1.4%. This happened in September, making it the most significant monthly growth since February 2022, about a year and a half ago or more. This revealed in a Redfin report, however, it's not all sunshine and rainbows. New listings remain 8.9% below last year's figure, primarily due to soaring mortgage rates. So you see, people still continue to not put their properties on the market. They haven't become acclimated, gotten used to the higher mortgage rates. A lot of Americans are sitting on piles of money in their homes, meaning the equity that their home has built since they've bought the home back in 1819. And some are opting to cash out, meaning that they're opting to sell the home, even if it means giving up their low mortgage rate. And as I said, we're going to see this more and more and more. We're going to see homeowners getting used to this. They're seeing all the equity in their home. They're like, you know what? We can go do something different. We can take this cash and do something different. But why? Well, it says here, they're worried there's a possibility home prices will fall if rates remain elevated. We expect rates to remain high for the foreseeable future. And this is coming from the Redfin chief economist. But we also expect prices to stay high into next year. So Redfin expects at this point for rates to remain high, but they also expect prices to stay high. Housing supply is so strained that even a small uptick in listings lures buyers off the sidelines, bolstering sales. Despite this, a spike in mortgage rates has led to a 1.5% drop in closed sales. Again, not a big number from last month signaling caution among buyers. Roughly 53,000 purchase agreements were canceled last September. Now, it's a big number, but if you don't pay attention to how many contracts are canceled every month, then it seems crazy. But it's not. It's a little bit higher than normal, but nothing, no spike really. This is equal to 16.3% of the homes that went under contract that month. The highest percentage since October 2022. So it's a little ironic that it happened basically the same time last year. We're in October now. This data is from September. Last year, rates hit 7%, which was the peak for the year last year. Same thing we're experiencing now. It's hitting 8, and this is the peak of the year, and we're seeing this data. This is very seasonal, guys. When mortgage rates surpassed 7% for the first time in two decades. And so the month before September, we saw a 15.2% cancellation rate. The month earlier was 15.8%. So it only went from 15.2%, 15.8%, to 16.3%. So less than a 1% increase month over month. Buyers are cautious right now. They want to make sure they're getting a good deal given how much mortgage payments have gone up. When they don't feel like they're getting a good deal, they're backing out, and I don't blame them. If you don't feel like you're getting a good deal, you need to walk because that could be something that you highly regret later. This agent talking was a Redfin Premier agent in Jacksonville, Florida, which saw the second highest rate of deal cancellations among the major Redfin Metro analyzed areas. Transactions are also falling apart due to skyrocketing insurance premiums and disagreements between the buyer and sellers over necessary repairs. I've seen that a time or two. Overall, buyers hold a lot of the cards right now, and sellers are having to give out more concessions to close the deal. And this is something you need to pay attention to if you are a buyer because you do hold a lot of the cards right now. If you can't afford a home, if you can't afford a home, then you've got to restructure your entire financial plan because we are in this new world. This is completely different. We have reset the housing market. There's a new floor, and you need to play by the new rules of the game if you want to go out and own a home. If you can afford a home, you need to realize that you do hold the cards right now, and you can get sellers to give concessions. So it's about negotiating a great deal right now. Get the seller to pay for some buy downs on the mortgage. You know, price, everything else. Make sure you feel like you're getting a great deal that you can live with. If not, don't do the deal. And that's what we're seeing with a lot of these people that are backing out. They're just saying, you know what? I don't feel like this is a good deal. So I'm going to walk away from this. The limited housing supply continues to propel prices with the median U.S. home sale hitting $412,000 in September. Home buyer competition is evident with 37.4% of homes getting contracted within two weeks. So because of the low inventory, we're still seeing a lot of activity on the listings that are there. Why? Well, because there's always, ladies and gentlemen, people that need to buy and sell and investors. You still got about a third of the deals happening that are cash deals. All right. So these people aren't getting mortgages. There's still business happening. There are still deals happening because inventory is so tight. The tight, the ones that are on the market are still getting really good activity. And that's why we're seeing prices continue to go up. Metropolitan data from September, 2023 and covers significant fluctuations while pending sales plummeted in Honolulu, Birmingham, Colorado Springs. They witnessed an upward trend in Northport, Detroit and Tampa. Closed home sales declined the most in Oxford and Fresno, but surged in Northport, Cape Coral, Tampa. Prices rose in Rochester, Anaheim and Buffalo, but dipped in Austin, Northport and San Francisco. Let's look at this chart here. Let's look at the price drops because I found this very interesting. You know, just looking at it compared to years before, we've got, you know, a significant spike here in price drops. It went from, let's see, at the peak here, we were about 1%. We're about 1% year over year below last year's price drops. And now we've actually spiked up over last year's price drop, about the same 0.2%. But when you look at it visually, you can see that it's going that direction. And this is direct evidence, guys, direct evidence of the mortgage rates that's happening right now. So you have to understand right now, we're in the middle of two down cycles at the same time. It's the 10 year down cycle, which we experience every decade or so. The last one was 2008. Now here we are again. We're going to hit 4 million transactions, exactly the same number as 2008. And we're in the fall, which every single fall we see listings rise, prices drop, days of the market go up, price drops come up. We see all this year after year after year. So I don't want you to be alarmed by this or think, oh my gosh, the market's just crashing and burning and, you know, everything's collapsing. That collapsing word seems to be a buzzword that I hear a lot with the YouTubers that are selling a course to try to get you to buy to prepare you for the housing collapse that they're telling you is going to happen. And look, there may be a housing collapse. I don't know that. All I can do is look at the data here and tell you it's never going to go to zero. The worst year transaction wise was 4 million transactions. That's where we are now. We've got to be at least somewhere close to the bottom. If we're going to hit, there was a group that's calling for 3.8 million transactions next year, lower than this year. Hey, if rates stay up, I don't see why that wouldn't happen. You know, I don't see why that wouldn't happen. Zillow has reframed their forecast. They were calling for, you know, 5% to 6% price increase over the next 12 months. And they've revised that was like June to June. They revised it from September to September. They're calling for 2% year over year growth. So they revised it from, you know, a full out just bull, full blown market housing bull to 2.2%. Year over year increase, September 2023 to September 2024. Now let's dive a little bit deeper into this data and just get a full update here where we are active listings. We're still well below where we were last year. Let's see, we're at 14, 15. So now, yeah, we're right there around that 14 to 15% lower. Now you see every year the active listings drop off. I think that has to do with people just taking their properties off the market, not necessarily a ton of sales happening. Because as you can see with the number of sales, let me pull that up, home sold. You can see we don't have like a surge of home sales every year, right? It seems like it kind of is on the downtrend this time of year. So, you know, when you look at active listings and you see this big curve here where it's just like really sharp curve, right? For the last two years. And let's add 2020 in the mix and see if it kind of does the same thing. Yeah, we see this curve. And this was the, you know, this was the shutdown, COVID and all that. But it also has this curve down. You know, when you look at that and you look at home sold, there's really, you kind of think, OK, what happened? Well, I believe that that is people taking their properties off the market as well as some being sold. This is interesting, new listings. You know, they are, you know, it's catching up to last year. We got to where we were about 26, 27% lower year over year. And now, now we're just, you know, 3.9% lower than last year. So new listings have come on. And I think that that is something to talk about because where are these new listings coming from? Well, I believe it's owners who are becoming finally acclimated to the mortgage rates. And they're, you know, maybe they, you know, they just really needed an extra bedroom. So like, you know, we're going to buy the bullet here. We're going to get a new home anyway where we're going to get a nice interest rate because the buyer, the builder is buying the rate down, you know, or maybe they got an owner off market who bought the rate down or maybe they bought the rate down. OK. Either way it goes. Here's something you need to be thinking about. If you are a home buyer and you can afford a home right this second, you can go out there and actually get a pretty decent deal and you can get it at today's prices. Next year, year after, whenever rates do come down, you can renegotiate your rate later. You can't renegotiate the purchase price once you close on that property. You can get it at today's prices and go out there and get a great deal, be patient, make a bunch of offers, get buy downs, get a, get a rate that's not that bad. Write this second and then renegotiate it later when rates are better. Get new construction. There's a lot of different things that you can do out there. So don't think that all is lost here if you can, in fact, afford it. If you can't afford it, like I say, you've got to restructure your financial plan, your financial goal, your personal finances, and restructure it to the new world that we're living in because this is a new world and we're not going back. Inflation isn't, you know, some people think that we might get into deflation where, you know, there is no inflation. It goes negative every year. And the dollar is worth more. Who knows? We may have some years like that. How far down would it go? And how long would that happen for? You know, in my opinion, not that long. Who knows? But at the end of the day, I can only work with what I have right now. I can only put a plan in place for what's going on right this second. And if I'm a buyer and, you know, I've been priced out of the market, I'm going to say, okay, I see the new rules of the game. I'm not going to sit around crying about it. I'm going to put together a plan right now based on what I see right now and where I could be if I put together the right plan. That's what I'm going to be thinking about. Now, new listings shooting up, home sold, you know, we're on track for the same trends. You see these trends that happen, these peaks and valleys? They're like exact every year. Look at this. They're exact and even right here, right? We see this jump up. Well, we've seen the jump up right that year. We've seen the jump up this year. So I expect sales to kind of slow down, maybe have another couple of spikes going into the next year. Sales price. Sales price always seems to be on the downtrend this time of year, just like it is every year. And nothing is different this year where we peaked out and we're kind of on the downtrend. We'll probably continue down. We're going to end up the year positive and we'll see how it all plays out going into next year. An election year, by the way. Let's see. Off the market in two weeks. Heck, we're right there. We're right there with 2021, the year of the boom. When you talk about off the market in two weeks, you know, going pending in two weeks, days on the market. Let's see where we are there. Looks like we're two days under last year where we were. And let's see. Right now, we are meeting days on the market 31 days. And last year was 2021, the year of the boom, 27 days on the market. We're not too far off. Let's see where 2020 was. 2020. I wish this thing went back a little further pre-pandemic so we could really see where we were. We were about 37 days on the market back in 2020. So we're about a week shy of that. Let's see. Months of supply. We're right on track where we were last year. Months of supply. That's how many homes are being sold and how many active listings we have and how many months of inventory we would have at this rate of sales. So, pending deals. Again, very seasonal. We're right there as far as the trends go right where we normally are every year. We're lower, but the peaks and valleys are about the same. So, listen, overall, I feel like we're in an amazing spot. Honestly, you may be thinking, how are you saving that, man? I can't even afford a house. The middle class is disappearing here. Yeah. I agree with that. This has been something that happened really fast. If you look at how fast it happened, it was a little bit telegraphed, but if you're caught, you can get caught off guard by market shifting like this if you're not in the game, in the industry investing in real estate, owning a home in the middle of buying a home, a real estate agent. You can get caught off guard and you've been planning for years and years and years to buy this home and all of a sudden the plan that you put together and followed for a decade or two is now null and void. You can't even use this to even think about buying a home and you have to restructure the whole thing. Now, isn't that how it goes? I mean, I can't change it. That's the thing. I can't change what's happening for you. God, I wish I could, but I cannot change it for you. All I can say is that I grew up making $300 a week roofing houses and I worked my way to where I could afford to buy homes and I know anyone out there could do the same thing. Oh, that was 20 years ago and things were different. Yeah, it was different and it was a lot harder. We didn't have the technology we have now where you could not do things as fast as you can do them now. You can be way more productive. There's way more opportunity for people to go out there and really crush it and build yourself up. So I'm just one of those that, hey, I look at something, I'm like, oh, this is harder than I thought it was going to be. It's like being a real estate agent. Oh, after a couple months you realize this is harder than I thought it was going to be. So am I going to give up? No, you're going to say, okay, this is harder than I thought it was going to be, but you know what? I'm going to keep going. I'm going to put together a different plan. I'm going to pursue this from a different angle and I'm going to keep pecking away at this until I succeed and I think you need to look at owning a home as an investment because you're up against investors, ladies and gentlemen, the big-time investors. They're looking at single-family homes and they're saying, they're looking at their chops. Like these are incredible assets that perform really well. So now we're in this whole different world of not only just home buyers and interest rates and all that, but you've got investors, small-time investors and big-time investors who are out there who want to own these assets as well as you and you're competing with them whether it's directly on a listing or not. You're competing with the price they paid on one down the road or whatever the case may be. So what do you have to do now? Think like an investor. What is the future value of this home? What is the future income that this asset could produce? And what does that look like from an investment standpoint? That's the new rules of the game. Nevertheless, I digress on that. Let's dive into this couple here, making over $100,000 a year. And they're giving up because of the crazy LA market. And I want to read some of the comments at the bottom here with you. When Emily Blake moved to Los Angeles from North Carolina, she lived in a two-bedroom apartment. She doesn't remember how much her rent was. All she knows is she could afford it on her school teacher salary. Now in her mid-40s, she and her husband are leaving paycheck to paycheck unable to move out of their rent control department and they can't even imagine owning a home in the city. Blake and her partner both worked in the film industry. She's a freelance script supervisor and he's an assistant to a visual effects agent. Together, they made slightly over $100,000 last year. They're lucky enough to have a great deal on a rent control department at Echo Park, a fashionable neighborhood in the eastern part of the sprawling mega city where her husband has been living for seven years. Since Blake moved a little over a year ago, they split the rent of $17.50 per month. So why do they feel trapped and hopeless of ever buying a house? We can't leave, she tells Fortune. We would never be able to find an apartment for this rate. It just doesn't exist, she said. They used to think about buying a home, but that was before the pandemic housing boom drove prices to an absurdly unaffordable level, including a mortgage rate shock that is still playing out. Blake and her husband would be well positioned since they make more than the median household income and pay well under the median rent. The median household income in the city is $69,778, $69,778 per the Census Bureau. While the median rent for all bedroom and property taxes in the city is $28.95. But just look at the average home value in Los Angeles of $923,000. Hypothetically, at a 7% rate on a 30-year fix, monthly payment on a $900,000 home would roughly be about, well, $5,000, you know, $47.90 before taxes and insurance. And then you got to add taxes and insurance on top of that. We would love a house. We really want a house so badly, but it's not possible. You have to make over $200,000 a year in order to buy a house now. Maybe if they left LA, they could do it, and the average home value nationally is in fact much lower at $348,000. But that would require leaving their industry behind and even that is looking shaky now. Blake and her husband haven't been on strike and the Hollywood actors and writers, but they may as well have been. Blake is a member of the International Alliance of Theatrical Stage Employees, but she hasn't worked in, she hasn't worked any industry gigs since the strike shutdown, production across the industry. She says she's very lucky to have found temporary jobs that pay the bills, like subtitling for a post-production house and editing a web series. Still, she'll likely make less this year than last year because there's hardly any work. Everyone knows, everybody I know in my union has been absolutely struggling to find work since about November. So we're already kind of hurting before the strike has started. So industry changes are hurting this couple. They met over 100,000 last year and that's just not enough to really go buy a home. And really they're down to like, okay, should we stay here or should we move somewhere and where we could maybe actually afford a house. And it kind of sounds like with the way your career's going she probably could kind of strategically pick out a place that they could move to and find a cheaper home and probably live a lot happier. It sounds like. If you ask me, anyway, let me know what you think in the comments about this story. I'm going to read a few of these comments before we call it a day here. This is baffling as someone who also lives in California. My wife and I make a combined income of more than twice what they do. If the film industry pays that poorly, maybe work somewhere else. My spouse waits tables at an Italian restaurant and we make it nearly near enough to six figures and I after one dozen years working my way through the industry make a comfortable six-figure income. Even more interesting is the fact that we don't even live in the city where up in the Sierra Sierra Nevada mountains in a town of about 2,000 people and make arguably less here than we make living back home in Tacoma or LA. These two need a reality check. If you choose a career, you can hardly call a tat making fast food level wages. Don't cry about being able to barely scrape by. That's kind of what I was saying. We live in this new world where there are opportunities everywhere. Don't just settle and once you find a great opportunity, you take advantage of it, you're making that money, always be looking for another opportunity but never quit your current opportunity till the next opportunity is in place and continue moving up the ladder. Let's see. So these people chose to pursue their dream job over a higher paying career and we're supposed to feel sorry for them because they cannot afford a house in one of the most expensive housing markets in the country. Exactly. We all make choices. If you want to work in an industry that doesn't pay a lot and is located in a high cost area I made a choice for my career. I make very good money so I could either live in a modest home or apartment in LA or New York or I could live in a large house and travel. A large house is a different state but I have to travel 30 weeks a year. I chose a larger house and travel. Oh, okay. So he could live in a big city in a small place or he could live in not travel or he could live in a different state for 30 weeks a year. I'd also like to work much less than honestly I could but I have to change my lifestyle. I make the choice to continue working and maintaining my lifestyle. I'm not asking anyone to feel bad for me as I made these choices. It's the exact same thing if you choose to work in an industry that doesn't pay you a lot. Everyone talks about how good it is in California makes fun of poorer states like Alabama when I explain the average to the average person both states have the same standard of living because everything is so much more expensive in California they laugh. This article proves my point. I make 52 grand a year and my wife can't work due to degenerative disc disease in her back. I own a 2,000 square foot three bedroom brick home with a 2,000 square foot detached garage on 1.3 acres. Nice. And I can even I can even chime in on that because I'm in Alabama. I grew up here on the coast in Gulf Shores on the beach. It's beautiful. Florida, the Florida Panhandle beaches come into Alabama good 40 miles. People only realize we have beaches here. You can Google it Gulf Shores, Alabama Orange Beach, Alabama. That's where I grew up. That's where I live. Gulf Shores Elementary. So we're in a 4,000 square foot poured in place concrete like undestructible to hurricanes because we get hit by a lot of hurricanes. We bought it for 1.1 right before the pandemic. So it's worth 1.7 1.8 something like that right this second probably got up to about 2 million at the peak and the higher price stuff has taken more of a hit than your average median prices in the country. However, this house like in a big city this is a $10 million. This is a $5, $10, $15 million house depending on where it sits on an acre on the golf course, gated community. We love it. Our families live here but man the property taxes are ridiculously cheap. Cheapest in the country honestly and we love it here. It's small town. We have the beach. We have great schools. Great people. We just we love it here and we were kind of spoiled like if you think about moving to Dallas or LA or even right across the state line into Florida their property taxes are ridiculous compared to Alabama. Now they don't have income taxes over there like we have here state income taxes. So I would probably win in that department depending on what kind of home I did buy if I did want to move to Florida. But I agree with this. People don't realize like your dollar goes a lot further in a place like this and quite honestly I'm pretty spoiled. Let's read a couple more of these. Remember it says 100,000 combined. That's a 50,000 a piece and roughly 22 to 26 dollar an hour for pay. 1200 to 1300 a pay period not including taxes. I've heard the film industry is rough work for summer crew members requiring long hours and toxic environments. Not worth the lifestyle unless you're all about selfies with celebrities. All right. All right. So it looks like the consensus here is kind of the same as what I was saying. It's like we make choices you know get out there and make the best choices for you and your family because there are options. A lot of people think there's no options. You know I can't go out here and do this or that. Yes you can. The fact that you say you can't is the reason why you don't. That's it. Nobody says you can't go do anything. You can go do anything you want to do and if you fight against that then that there's your problem right there. You're just not willing to open up to the fact that you can do anything you want to do. You can. Does it take a long time? Sometimes yes. It takes a long time. A lot of hard work. No doubt but that's why it's worth it. All right. So with that I'll see you guys on the next video. Hit the like. Subscribe. I'll be back tomorrow with another update on our case. The Sitzer Burnett trial going on in Missouri Kansas, Missouri right now. Kansas City, Missouri where basically real estate commissions are on the line here on trial. They're also talking about the way that we are coached and trained and negotiated commissions with sellers and so on and so forth. So I've been covering that. I covered all five days last week and I will continue the covers this week. The trial is going on through next week supposedly. It's a three week trial so I'm looking forward to continuing coverage there. I'll give you another market update in between and until then we'll see you guys on the next video. Let's go.