 In other news interest rates yesterday hit 7.1% is the highest in the last four months We know we hit around that same number back in November 10th and since then it's it's been coming down it hit 5.9 Here recently it got into the high sixes and yesterday it finally tipped seven And got to 7.1 today. I want to talk about what this means for your business I want to dive into some slides with some data and really tell you what I think about all this But you know right this second now that was 24 hours ago You know what's very interesting is where interest rates are right now, which I'll tell you in just a second But the second thing piece of data that's very very interesting is mortgage applications dropped to a 1995 level And so everybody's calling for this gloom and doom kind of situation when all of this is was so telegraphed and More than expected in the market And as we all know as real estate professionals Nothing's ever going to zero closings are going to happen every day for the rest of our life And we don't have anything to worry about when it comes to all of this I'm going to talk about all this show you guys some data But the market can really go one of two ways right here You know if interest rates stay high and What I believe is going to happen This is just my opinion and my intuition, you know doing a lot of reading and research I believe that interest rates are going to settle somewhere around six. That's kind of what I'm thinking in the six range Which will be good because as I'll show you in a second The slightest changes in mortgage rates downward creates massive waves of activity There's agents still right now with interest rates where they are getting multiple offers In select markets around the country It's not the same everywhere and it's definitely slowed down a whole lot seven is a big big Change from where we are at were you know, 12 months ago and even 18 months ago 18 months ago Where we're looking at two and a half Yeah, they got a like 2.65 or something like that but that's okay because You know as a real estate professional What you have to realize is that we're not here to make the market do certain things make people do certain things We're gonna help help people through these situations and people need help more now than ever navigating this market where we're going because the the simple fact is That there are a lot of people that need to sell You know, there's a lot of people that want to wait and that's that's okay. That's fine Next week Monday. I'm going to do a break a full breakdown of Renting versus buying right. I'm going to illustrate with mathematical equations how Even in today's high interest rate market and how much higher it is to buy than rent on a monthly basis Right now as we speak how the numbers actually work out just over the next 9 to 10 years in your favor if you buy so stay tuned for that but But let's dive in here for a second first off here is the actual Uh Article here where mortgage rates are back above 7. This was yesterday Now today We're at 6.97. So it went down 13 basis points in just a day. So it just barely touched It barely touched 7.1 Now again, there's two things that's going to happen here You know rates are going to settle in now What I what I really believe here is that with affordability where it is Which is really high rehousing affordability is is out of whack honestly And what I what I see transpiring is that yes, there's a lot of markets getting multiple offers right now There's still a lot of activity out there compared to what you what you would think that it would be under these circumstances um, but what I feel like is that there's only Uh, there's only a certain number of buyers who can actually afford At today's interest rate and prices and I believe that we're going to run out of those type of buyers at some point in the year Things are going to get really slow Now interest rates are going to ease down a little bit and that's going to help tremendously And also prices are going to continue to ease down. So all that is going to keep continuous activity brewing And that's what I think is really beautiful about this year is that if you take this year To really build your influence talk to the as many property owners as you can Create as many new friends in the market as you can do your weekly email Do your social media that you are going to be so extremely busy This year and the amount of effort you put in Compared to how many closings you have and how much money you make is probably not going to equal the same as What you did in 2021, but you got a thing 2021 You know, you you didn't have to put forth that much effort make a ton of money. That was a one-off year and It wasn't really quite normal now the penal is swung all the way the other way And it's kind of teaching us grind And what's really cool is that when you go into a market like this and you get accustomed to the grind If having to build your business through a time like this and you build that influence so massively When we get back to a normal market where it's a lot more balanced out um and like you know Prices coming down suggest a buyer's market, but inventory does not say that we have a buyer's market It's the whole market's very confused right now And even gary keller said that this is the most confusing market that he's ever seen But as this happens prices continue to Uh to dwindle now, let's say doomsday happens and they stay at seven or even go to eight Well, what happens is prices come down and when prices come down Um properties are not going to be hard to sell And we still have 75 of absentee owner investment properties Being sold cash We still have 29 of properties overall All transactions being sold cash and that is up You know back in january 2022 is 27 percent december 2022 is 20 28 percent in january 2022 is 29 cash transactions So cash will continue to happen and if prices come down cash buyers are going to come out by the You know by the truckloads because there is a lot of liquidity on the sidelines There's a lot of cash on the sidelines it makes things so interesting I I believe one of the one of the key things for real estate agencies to be a listing agent You know focus our your energy on listings and take what buyers come out of those efforts. I said that in my book list to last But I want to share with you Some slides here Um this shows you the mortgage rate situation Let's see if I can move this just a tad so I can see what's happening. Here we go I don't know if you guys can see that really well or not, but This is the mortgage rate situation the mortgage. I'm sorry mortgage applications And then you can see here that this right here was the 2008 actually 2008 You know it came down and but really you know the 2000 You're really on like we're on it. It's almost like it's right there 2016 14 Uh, but we are a little bit lower a literally a tad And that line actually goes back to 1995, but what what's so interesting about this to show you this Is that You know, we had the little rush of mortgage application activity You see that right here You see it right here, you know mortgage application was down and boom. We had that pop. It was a 28 pop Uh week over week Okay, so so that shows you because mortgage mortgage rates went down just a tad So that shows you that the the slight little decrease in mortgage rates are so much pent up demand Okay, and what did that what did that do when that happened? boom We saw the data there with with an r that we had a 8.1 percent month over month pending home sales Right, which was it which was the second straight month It was the largest monthly increase since june of 2020 Okay, the largest increase since june of 2020 now that's going to come back down because interest rates have come back up There it's it's it's reduced demand and so here we sit but but but what a great test to the market Right, what a great testament to the resilient Market that we're in that the slight little decrease in interest rates is going to create some serious Uh transactions Now a couple of key things to note, you know, right now in america 2022 the average equity in a house Is 58 percent Back in 2008 it was 19 27 38 44 58 percent you guys know how far down prices have to go to actually hit any kind of real danger when it comes to equity Yes, there are people who who bought houses at the peak that uh at a fha at 3 loan or whatever that are Under water right this second very very very small amount and those people as a whole Did not buy to sell it next year. They bought it to keep it for 10 years, which in fact they will win Delinquency rates are up on FHA homes right now Just a tad and I believe that tad is about all we're going to see But that's just my opinion again, you know, I'm not saying that I know what's going to happen because I don't Nobody does But it's just interesting to look at all this and think about what this means in relation to your business So following the two and a half percent drop in home prices This is fanny may talking in the second half of 2022 Fanny may expects home prices fall another 4.2 23 Okay, and then in 2024 another 2.3 So they're saying prices are going to drop four a little over four percent this year and then two a little over two percent next year So they're thinking slow decline all the way through the end of next year Okay, but look at this if any may is right And this housing slump, uh, this housing slump would see the national housing market pass through a mild Home price correction. Okay, not a full-blown housing price crash Right. Okay. You guys all agree there that if this is true 4% and 2% We're going to look at a mild home price home price correction, which would be just fine And after all if these price drops do happen national home prices get this would end up 2024 still up 29% from march of 2020 levels So even if we go down another Nationally speaking right and so what's interesting to to to note about this is that They're talking about about a 7% decrease from now to the end of 2024 of home prices And so if it's a national average of 7% that means you've probably got some markets that went down Another 15% 20% possibly and then you've got some markets that go up in price from here So keep that in mind that this is all relative to your local market But let's look at let's look at a little bit more Data here. This is this one blows my mind Okay, this is home sold in the country that the red is 2020 the orange is 21 the black is 22 And the blue is 23 Now look at the trends it always starts down and then it always picks up about, you know, february You see closings happening and then look how correlated every year is You see the peaks are the same as the bottoms every year. You see that See how they mirror each look at that look at that And then look when 2020 came back from the from the being shut down Look it came back and you can't even see it because the orange line. It's almost identical All right, and look at the black it has the same peaks and that's this was last year It has the same highs and lows at the same times throughout the year. Isn't that remarkable? It's just amazing to me how correlated every year in how seasonal these markets are And this is inventory. This is active listings. Now everybody says, whoa, you know, you know listings are going up And as you guys know is real estate professionals that ain't happening But look at look the blue line right here, which is this year and the orange is 2021 And remember 21 was the boom year 21 was the boom year You can't even see the blue line Like, you know last year the market, you know, the black you can see it was an abnormal curve But you can see all it did was get get us right on track from where we were in 2021 And then look at the red. This is 2020. We're nowhere near 2020 And what's interesting about this chart is to see The the that the that every year in the beginning it's coming down It starts to creep up in February It slowly rises to august and then it always starts to dwindle down It's the same cycle every year guys Nothing to be worried about. So this is prices and you can see right now the blue line has Officially intersected the black line, which means we're going negative year over year prices on a national level now you may already be negative in your market right now or you may be positive Okay, but this is just on the national average price per home We are uh, we are we're negative. We're we're even at zero percent We are approaching negative and that's when we're going to see some Some uh, some nasty headlines in the news and when we get about here, which is june, which is when everything peaked out last year That's what we're going to have maximum year over year negative prices And we'll probably a little lower than we are now and so even the market's going to be just fine We're going to see negative headlines in the news Nothing to see here But again mortgage applications Okay Pending sells up. Let's go. And what does all this mean for your business? That's what you might be asking yourself Well, let me tell you what it means Absolutely nothing It doesn't mean anything Your job is to go out there and help these people that need help buying a selling closings are happening every day Do not sit around thinking oh, there's no deals happening Because that's when you're going to look back three years from now and realize wow, there was a lot of transactions happening at really good prices The market always bounces back Always surges back 110 of the time and the quicker the fat that as fast as this market has shifted I believe my theory is is that the market's going to shift back even faster So keep that in mind As this thing unloads, but we know closings happen every day For the rest of our lives regardless of market conditions. I've been saying this for years guys for years This was my business back in 2008 Here's prices coming down My business I kind of held firm with my market share And then all of a sudden when the market bounced back my business exploded and that's how I got to 100 deals a year Right I didn't do anything different I just time went by my database grew My influence grew and then and then my then the market did the rest So take advantage of this moment guys Please take advantage of this moment. I'm gonna You can't look back and say I didn't tell you to go take advantage of this moment This was a screenshot of mls From january 2014 to the end of december 2021 so eight years And there I am right at the top of my entire mls That's teams. That's legends. That's everybody and it's because of what I did During the 2008 2009 2010, which is your moment right this second The agent who creates the most friends with property owners in the market wins period Now what do you need to do? Your daily goal needs to be five new friends a day property owners in the market Okay over five years. That's going to equal 6,000 people in your database You're going to create a weekly email for your entire database on the same day of the week forever You're going to watch the mls hot sheet every day to stay on top of the market You're going to make calls from 9 to 12 every day and do social media all afternoon It's not real difficult guys I'll leave this here for a second so you can screenshot it but it's This is super easy stuff. You just got to go Do it the problem is a lot of you just aren't doing it because you're getting caught up in the media And and everything else and as far as this social media goes Like I said, I'm going to do a webinar march 16th Make sure you're part of my text community. So just text me at 251 312 8 844 251 312 8 844 make sure you're a part of that so you can get the link when I send it out Along with everything else I do on that text platform But I'm doing a webinar march 16th to go through my process of creating social media at scale to build my businesses So don't miss that I'll be there All right Now, of course, I can't go through every little thing, but everything I teach you is free Everything's free guys Zero to diamond.com. I got courses Seven or eight courses there all free People are absolutely crushing it Right go read my book List the last how to survive every real estate market crash All right, I'll tell you what I'm going to give away five I'm gonna give away 10 10 sign copies in my book. I got a whole box of them right here next to me It's it's taped up or I would break out a book um But make sure you're part of this text. I'm going to give away 10 sign copies today Right. Um, and also I'll give you these slides Text me with that number and I'll give you all these slides For this presentation All right but anyway The bottom line is is that? Yeah interest rate shot up. Yeah Buyers may be a little scared. That's okay. They they should be scared Here's the punchline for buyers if you're gonna buy to keep it for Save in five years five 10 years You know, you are going to make money Through principal pay down and appreciation and this is taking out consideration for Utilities property tax increases real estate commissions when you need to sell I'm going to break all this down in a video next week I'm going to give you the exact equation here to go through your go through with your clients to show them the difference In buying versus renting even in this high interest rate market now. I'm not saying oh You know go buy because it's better. I'm saying Even right now it's good What I would do if I were a buyer and I can wait I would probably wait a little bit because rates are going to ease just a tad And I would wait just a tad so that I could be in even a better position But even right now it's it's like night and day It's like honestly it comes out to about a quarter million dollars over the course of nine years That's if you bought something For with a 300 thousand dollar loan at seven percent interest and you never refied Out of that loan you kept it at seven percent basically worst case scenario You still make a quarter million dollars through a debt pay down Principal pay down and appreciation I'm going to break all those numbers down next week If you guys need anything put it in the comments. Let me know what you think about all of this I'm going to put another video right here For you to continue watching and until next time keep selling