 a surprisingly downbeat forecast for the 2020 housing market from one of the largest names in real estate and it could have big implications for consumer spending. Diana Ola joins us right now with more Diana. Good morning. Good morning. Becky realtor.com one of the nation's largest home listing site says the housing market will slow down next year. The headline of the report is home sellers will remain on the sidelines and that will cause the inventory shortage to get even worse and could even hit that record low. Now low inventory will cause sales to drop just under 2% from this year according to the report and home prices will flatten nationally as millennials who account for half the buying market struggle to afford overheated prices in some major markets. However, realtor.com is predicting prices will actually go negative. The first time that's happened since the housing crash. Now those cities include Chicago, Dallas, Las Vegas, Miami, Detroit, St. Louis and San Francisco with prices weaker sellers will have little incentive to put their homes on the market. Now home construction is increasing, but it's largely on the upper end of the market, not at the entry level where demand is strongest. One of the only bright spots in the report is that mortgage rates will remain low. And in fact, they moved sharply lower yesterday on the China trade news. Okay, what's up everybody? Ricky Kruth here. Welcome back to my channel. So that was CNBC reporting that realtor.com was calling for a market downturn in 2020. They're calling for one point eight percent less transactions next year. They're also calling for their average prices to flatten out and even in major cities for prices to decline. So what in the world does this mean for real estate agents and real estate investors? Absolutely nothing. It's good to know the market trends. It's good to know where we are in the market cycles. What we need to realize is that there's always, always an opportunity. Let's keep in mind a few things here. Number one, always like and comment on every single one of my videos. Something else that we should remember is that closings continue to happen every single day, regardless of what the market does. The market can go up, down, sideways. It doesn't matter. Closings are going to continue to happen every single day. And every closing represents two opportunities, a buyer and a seller that actually went through with a transaction and closed a transaction. So this news isn't really going to affect us very much. If anything, it's going to excite us because it's going to show us that there's going to be some opportunities next year. Why? Because the mainstream of the industry, mainstream agents, mainstream people out there watching the market, they're going to view this as a negative and they're going to start to pull back. They're going to start to retract. They're going to start to slow down. They're going to start to tell theirself that business is going to slow down. So I need to start preparing for this slowdown. Whereas the zero to diamond real estate agents like myself and you that are watching, we're going to go towards the downturn. We're going to have an even stronger commitment in the industry because we know that this is where we're going to what we're going to acquire more market share. I'm going to link a video below about the shortage of business during a market downturn that I really think you need to watch. Let me tell you what happens during a market downturn. Okay, let me tell you about what happens from the point of view of the real estate agent and how we can thrive through this and also a real estate investor and how we can thrive through this. Now, as a real estate agent, it doesn't matter if you get in the business the very day that the market crashes the hardest. Okay, it doesn't matter. Closings continue to happen. What is our job? Our job is to get out there in the market, talk to as many people as possible with the best intentions and build our brand. Okay, through the market crash, a couple of things happen. This is very interesting. As the market crashes, okay, this is when your big time investors come out of the woodworks because they want to buy when it's cheap. That's even more extremely relevant in today's market than probably any time before because we just experienced the big crash just 10 years ago. Okay, so the big crash happened a decade ago and now we're still kind of people still have a sour taste in their mouth about how that affected them. Okay, so they know another crash is coming. So there's a lot of cash on the sidelines waiting on the next crash to happen so they can take advantage of cheaper prices. They're not going to let what happened to them in the last crash happened to them in this crash. So there's a lot. I repeat a lot of people buyers investors sitting there waiting for prices to come down. And if we're the agent that understands this and we're out in the market talking to people seeing what we can do to help them, then we're going to find these people that want to invest at cheaper prices. Now, where do we find these people that want to invest at cheaper prices? Where are they? Well, for one, they own property already. Okay, they live in houses already. So if we're doing what I teach in my zero to diamond free real estate coaching program, we're going to be circle prospecting calling expires or sell by owners, whatever you're doing, we're going to be reaching out to these property owners and we're going to say, Hey, the market's crashing. Prices are this house did just sell in your area. Didn't if there's anything you could do for you, do you want to buy, sell or hold? That's the three options for a property owner during a market downturn. They're either going to buy because prices are cheap and they want to buy right now before prices go up. Okay, I feel like when the good deals come through, they're going to have multiple offers on them during the market crash. Okay, I'm kind of predicting this. I think as the market downturns and we're going to see lower prices, I think we're going to see multiple offers during the downturn because there's going to be so many investors sitting here with cash that want to buy these good deals. So there's going to be a lot of urgency there for people wanting to buy at cheaper prices. Okay, then we have the people that want to that need to sell because they're in trouble. Okay, something went wrong. The the crash caught them somehow financially. They didn't see it coming and they're in a position where they need to sell. Okay, so now we're going to help them sell. What do they need to do? How quickly do they need to sell it? Right now because they're in trouble. So they're again, urgency. So we've got buyers that want to buy now, sellers that got to sell now. Okay, then you have people that just want to hold. They want to ride the market out, see where it's going to go. They're not in trouble. They don't really have any cash to invest or don't want to invest and they just want to kind of see where it goes. They want to be very conservative and that's fine too because when the market rebounds or if something significant happens in their life that causes them to need to buy or sell, we're going to be there for them. So even the people that want to hold that don't want to buy or sell anything while the market's down or right when you talk to them, that's okay. We're going to ask them if they have an agent they would work with, if they were to do something and then we're going to ask them if it's okay to stay in touch. The whole nine yards, the script. Okay, the Ricky Crews zero to diamond script. When the world can I do for you? Is an agent you would work with? I'd love the opportunity to stay in touch with you and work with you one day. We're going to grab their cell number and their email address. We're going to do weekly emails and I'm soon going to release a mass texting platform. We're also going to text that weekly email link. We're going to text that link as well to our clients. So that's where you're going to find the people that want to buy, sell, or hold. Alright, and I'm telling you that there's going to be so much opportunity. It's going to be unreal. If you're going to stay on the phone and continue contacting people and be that agent that's out there making contact, helping people through this hard time, then you're going to be the one that not only thrives but when the market rebounds, you're going to have acquired so much market share that your business is going to literally explode. Now let's talk about the investing side. If you're a real estate investor, what are we going to do? How are we going to prepare for this? What are we going to do to take advantage of this opportunity? So first off, your real estate portfolio should be set up for long term. Which means that everything that you have in your real estate portfolio can't really get hurt in a market downturn. There's really no risk involved. That's how my real estate portfolio is set up. For example, all my long term rentals, I have mortgages on them. The rent pays the mortgage plus. Okay, so I have cash flow there on all those properties. If the market does downturn, nothing's going to affect that. Rent may even go up during a downturn if people are getting their houses foreclosed on. So it's a very safe bet to have mortgages on those properties. The rent is paying the mortgage off and I have cash flow out of it that I can put back into the properties to further the appreciation and equity. Now if you're fixing and flipping, if you're buying properties to fix them up and flip them immediately or if you're just buying them to not even fix them up, just flip them if you're finding good deals. If you have some kind of angle, some strategy to get really good prices on property that you can turn around and sell for higher prices. Okay, this is where I don't want to over leverage myself at all. So I play it really safe and I don't borrow any money on my fix and flips. I pay all cash for my fix and flips because my fix and flips are short-term investments. So I don't want to borrow money on short-term investments because something could happen. I'm not expecting short-term that will create a situation where I may get in trouble. Okay, so that would be highly unlikely, especially where I'm right now financially, but I still want to play it super conservative. Okay, so I have partners, we go in, we buy these properties one a month or so, on average I would say, fix them up, flip them, and get them gone. As we're fixing and flipping, we try not to own too much at once because if we own too much at once and the market crashes, then we own all this property and we could get hurt if prices go down far enough. But if we only have a handful of houses, you know, five houses, something like that and the market comes down some, we can sell all those for maybe a little bit of a loss or break even or maybe just make a little bit, we can get out of those quickly and then kind of regroup and know that, okay, we're in a different market now, we need to buy at much cheaper prices than we were buying. And you see how that works, how you can't really get hurt if you play it like that. So the market has been changing for about 18 months now or maybe longer. Ever since interest rates started to creep up, then they creep down. Okay, so and I think it's a good thing. I think if the market would have just kept going up and up and up and up, we'd probably be in more trouble right now than we are. So I think that that's a good thing. I'm glad it kind of flattened out and settled out. That was a good thing. And if next year, realtor.com is correct and prices kind of decline, flatten out, we have less transactions, I say it's time to fully commit to the industry, whether you're an investor or a real estate agent, I think it's time to go full force. Right now, December, right this second, I think you should be going full force to build your database. Find those people, build those relationships. Because if things do turn around, let's think about the two different scenarios. If things turn around, you're going to have all these relationships built you can reach back out to and say, hey, if the prices are down, do you want to buy, sell or hold? Okay, or if the market increases, let's say they're wrong in the market increases, you still have all these people you can you can reach out to and say, hey, do you want to buy, sell or hold? It's really the only three options, whether the market is going really great or whether the market is going really bad. Buy, sell or hold. Anyway, I don't want any of this news or media about the market flattening out or turning down or less transactions to scare you. I wanted to excite you. That's wanted to make this video and just make it clear that this is not anything to be afraid of. This is something you should run towards. I want to give you another video right now that I think will really help you with your mindset and that's three real estate mindsets that I made about a year ago. I'm going to link it below along with the shortage of real estate business during a market crash. I'm going to link both of those videos below and also we're doing the zero diamond talk show every Tuesday, 4 p.m. Central. It's live right here on my YouTube channel. My co-host Joe Rosen and we have a lot of fun and we take your calls. So we have a really good subject every week. Sometimes we have a guest and we take your calls. I want to hear your questions. It's designed so that you guys can call in and ask questions and I can help you through some of your specific problems and questions. I'm also answering every single DM on Instagram still. So if you want to reach out to me there, feel free. And if you haven't joined my absolutely free real estate coaching program, that's at zero to diamond.com. We're making so much progress in the industry. I have thousands and thousands of messages from you guys telling me all your little successes and things that that zero to diamond has done for your business and your life. And so I'm just very humbled and happy to be a part of it. Anyway, that's it for today. Thank you guys so much for watching. I'll see you on the next video. Let's go!