 number of U.S. home sales plunges to lowest level since 2012 number of U.S. home plunges to lowest level since 2012 so number of homes available for selling units on May 2 and as a fill by with 7.1 percent previous year the first annual declines in April of 2022 reducing availability to its lowest level since 2012 Redfin which reported the data states nearly every homeowner with a mortgage has an interest rate below 6 percent meaning many are opting to stay put because selling and buying a new home would mean taking on a higher monthly mortgage payment housing affordability continues to be a major concern with the median price of an existing single family home rising from $300,000 in 2020 to $393,000 in April of 2023 this has caused the mortgage payment as a percentage of increase to jump 14.7 percent to 26 percent let me read that one more time this has caused the mortgage payment as a percentage of income to jump from 14.7 percent of your income to 26 percent of your income which by the way that's always what I go to when these realtors and mortgage office are like well let me tell you you know the home prices are this and no affordability is something you have to be thinking about and Tom the guy that gave us a report at the elite mass fund that we had the report that he gave Vinnie in 2021 realtors in California brokers realtors in California made 18 billion dollars in commissions in 2021 and $18 billion dollars in commissions that dropped to nine billion the following year okay nine billion dollars of the following years how much commission they've made which means there's not a lot of inventory to sell the prices may be held up but there's not enough inventory to sell Tom when you see the story what do you think about well what I think about is on its face that's exactly what we're saying and what this gentleman pointed out and some information out that I was digging in you know a year ago I thought interest rates could get to 10% I remember I said it on this podcast they got up to seven seven a half percent and they've they've kind of mellowed a little bit but it's a sustained it's not just a spike it's not coming back down and the interest rate is exactly what is driving this that if I was to sell let's say I had to move from Nashville and I had to move to you know plantation I look at it and say well if I sell my house in Nashville and then buy house and plantation you know 7% interest rates I'm screwed so you know what people are doing I will lease the house with this 3% interest rate in Nashville and I'm just gonna go lease a house in South Florida because I probably even if I sold in Nashville I probably wouldn't be able to afford to buy the house so what's happening is the supply is stuck this is called the stuck supply problem where people even if their job forces them to move their Airbnb or they're keeping their house in the previous market because as a low interest rate and they want to preserve that interest rate by the way it's also got property tax based on the purchase value way back when and if they bought that house in Florida they're gonna be buying at a higher purchase price so their property tax is gonna be up in addition to the actual payment so we have a supply problem that is keeping prices high and the high mortgage rates is causing the supply to be low because no one wants to sell their houses I'll flip it for you Pat can we go to San Francisco for a second home prices are down 17% in San Francisco why is that I'll tell you why cuz supply is coming up why is supply coming up cuz people are leaving and why are people leaving because of the jobs in the city and the policies in San Francisco so when you have intervening factors in San Francisco that are causing people to actually say you know what I am selling and I am leaving the supply comes up and the prices come down despite the mortgages let's just stop it right there for a second because what he brought up was San Francisco okay and what he said was is that prices have plunged you know 17% in San Francisco and they said from the beginning of the video here that they're getting their information from Redfin so let's just dive right over to the Redfin data here in San Francisco so this is right off Redfin's site and this is the median sales price in San Francisco California right and so we started out the year the median sales price was 1.312 million okay 1.3 million and right now we stand at 1.5 million so we're up right now over $200,000 when it comes to the median home price in San Francisco we're up $200,000 from January 1st on the median home price and it does have the year over year median home price down 4% let me let me pull that up so you can see boom so the median home price right here is down 4% year over year but we're up $200,000 from January 1 and the bottom was 1.27 million so we're up even you know $250,000 on the median home price and and you see if this trend continues here we'll get into this we'll be in the same we'll be in the same range as we were the last two years here we may even go to a new all-time high we'll just have to wait and see now what they also said was that there was more inventory so let's just go over here to new listings not new listings this is active listings these are listings that are actively for sale in San Francisco okay and you can see right here he said that we're up okay supply in San Francisco is up right however we're down it shows right here this is redfin guys okay this is the site that they were talking about this is where the data is coming from okay right here we've got active listings in San Francisco bam and it shows right here that we're down 19.4% okay we're down 19.4% so my question is what is going on here if you're telling us that prices are down 17% but actually inventory is down 19% you're telling us inventory is up and you're telling us prices are down when prices are up over 200,000 on the median price in San Francisco just this year alone yeah we're down 4% year over year but you said we're down price wise 17% in San Francisco it's crazy guys this this is this is a this is a publication here this is a media outlet okay the Patrick Bet David podcast that is watched by millions and millions of people and it just it's wild to me how these numbers get thrown out there and this is part of the problem in terms of just data getting thrown out there and people getting the wrong impression of what's happening in the market I'm not saying the markets good or bad Patrick talked about affordability by the way I actually went to Patrick's office confronted him about the real estate market it was an hour long conversation I'll link that in the description here if you haven't seen it face-to-face interview about this exact subject but nevertheless he talked about affordability and so what affordability is doing right this second is getting right back to the 1990s and early 2000s levels of affordability when you take the mortgage payment today's point mortgage payment and adjust it for inflation and then you also look at the percentage of household income that goes towards mortgages you'll see that we were absolutely spoiled over the last decade and a half it's tougher now yes but it's the same as it was in the 90s and early 2000s now where we go from here I don't know because prices are continuing to escalate and that's why I think prices are going to slow down from escalating so much because of the affordability issue we can't get to where we're paying half of our our median household income towards mortgages we can't get to where you know affordability is historically high that's not going to work we're not there yet but we're getting closer and closer as prices continue to go up we're also sitting on over seven percent mortgage rates again and that you know they were down in the the mid sixes for a while now we're back to the seven range so we'll see how all this plays out but if you heard the gentleman there Tom I believe is his name he said that he was he was predicting for mortgage rates to go to 10% and even higher and remember Patrick put out a tweet last year that said we're looking at 10 to 12 mortgage rates guys sorry we're going to see it happen it's going to be a 2008 market crash so anyway I just I had to do this video because when I watched this video hoping for real data here I didn't get it I got that San Francisco prices are down and that supply and inventory is up that's not the case when I go exactly to the source that they say they're looking at so if you guys would please explain this to me what they're looking at I saw the little insert of of something that they were reading there couldn't really make heads or tails of it where it came from what it was what it was really trying to say but I can tell you this according to the redfin data what that gentleman just said was absolutely wrong so anyway what I want you to do is I want you to go out there and find your your lane in this market there is a lane in this market for you to go out there and crush it if you're going to sit around and cry and complain like everybody else like most everybody else about how hard this market is if you're a trying to buy a house if b you're trying to be a real estate agent if c you're trying to be an investor how hard this market really is then you're not the champion that you thought you were real champions they rise in moments like this they find their lane and they absolutely crush it they don't listen to what everybody else is saying because they don't want to be like everybody else they want to be above everybody else okay that's a true champion what am I doing right now I'm sitting being really patient for multifamily deals to come through we're looking at deals every single day but in the meantime I'm buying new construction homes right that's a lane that I found why is that a lane for me because down here in Alabama I can get a house for a three to 350 brand new D.R. Horton's gonna give me a great rate on an investor loan 5.9% they're gonna pay 5,000 a closing cost and I can cash flow incredible cash flow on these homes I'm buying five of them right this second just because I'm bored waiting on some big multifamily deals to come through I'm not going to sit around and say the market is horrible the market is hard the market is tough no I'm looking out three to five years down the road to 10 years to 20 years down the road it's not hard to see what's going to happen so anyway I hope that when you hear stuff like what we saw in this video and you see headlines that you're going and doing your own research guys go and do your own research if in fact you're worried about the market or you want to keep up with the market go and do your own research but know at the end of the day the closings are going to happen every single day forever all right people are always going to want to and need to buy and sell and I saw a video of it was in Canada in 1981 when rates were 18 to 20 percent they came down to 15 percent and it was like a frenzy of buyers and guess what those buyers they interviewed a few of them and they said you know what we can't do anything about rates we need a house if you need a house if you want a house you can't do anything about the rates you're going to have to just live with it and guess what they slowly became more accustomed to the higher rate environment that's what we're seeing we're going to see buyers become more accustomed to the fact that they can't do anything about it the longer they wait the longer they wait the rates just aren't going to drop and neither are prices and so that it comes to a point where it's like all right well we've waited long enough how long are we going to wait we got to do something at some point we can't do anything about it let's go out here and do something and that's what we're going to see moving forward it's going to be a slow process supply and demand will work itself out it's going to take years to do so but it is going to happen guys so when you're when you're on the top you never think it's it's going to come down when you're at the bottom you never think we're going to get back on top but this is just the normal market cycle so take advantage of it don't complain about it get in there get your hands dirty get to work look at this on a long-term point of view and you're going to be just fine let me know if there's anything I can do to help and we'll see you for the next video let's go