It’s so surprising that over the last 10 years, housing price have really being going up and up, it’s largely being in sales market for years during that time a lot of people have being waiting on the sideline just patiently expecting prices to come back down to a more affordable level to use, the opportunity that we’ve all being waiting for especially when 4 million people have stopped making their mortgage payment By the stock market recently saw a 34% correction it’s peak over 36 million people are still in unemployment and almost 100 of the 10 million mortgages are in forbearance.
So this must have some sort of complications for the real estates market right, well let’s take a look at th data and the research and then we’ll use that to determine how hard the real estate market might be hit over the last 3 months. And 3 years and if it does drop then when is it a good time to buy in. And I see this as someone who pretty much felt their entire career from real estate.
I started my career as a real estate agent in then my whole value started going down, then I hosted that money go begin investing in real estate in 2016, 2012 and even when I was making YouTube videos back in early 2017, the main focus and topic of the channel AR the time was real estate.
So let’s go back to it and cover exactly how and what’s going to happen with the housing market, what’s going to happen with nearly 10% of the mortgage or in forbearance, will the real estate market come crashing down.
First it’s bit surprising why so many people are wondering about the hotdog market because unlike stocks you can’t just go online and check the day to day price fluctuation of housing value. It’s bit like you could check home value, instead the price of a home is largely determined by mortgage interest rate, the amount if demand for that specific house and area and how any other listings are on the market and how well that harnessed market is accompying. This is why home values become a very serous unknown number that becomes very difficult to analyze and relate to the economy and because real estate is more difficult to sell that your carnival stock, what’s because in order to fully determine what home value are going to tell us what’s going on with the market and that takes a lot of time.
You can’t just go and list a home and sell it in a matter of hours, you have to go put it on a much have virtual showing maybe hold open housing get a buyer that have to negotiate for deal and then do a listing and then get a loan.
The entire process from start to finish could take up 60 days, so what we see now in real estate is really just a refection of what’s happened 2 months ago, not what’s going in today, but let’s take a look at what’s being happening and then get to use that data to figure out what might happen in the future.
And so again that let’s talk about a few of these looking real estates concern and the first would be recorded high unemployment, where it those people are not making money, they’re not making their mortgage payment and like I mentioned earlier 8.8% of the mortgage are done forbearance, which means that lenders need to make payment to the investor whose oh behalf of the home owner and even though the federal Reserve have agreed to buy these mortgages backed securities from the bank, the money is that in some ways, banks might begin to strike thru though quite a loan.
Which means that if you are a buyer is able to qualify for a loan then, when they’re few buyers out there buying for a loan the cost price is bound to go down.
Another concern is that when 35 million are unemployed, many if them will be unable to lay their rent, this means that landlords might have to reduce the rent to Help ease the burden on the tenant and would lower rents and values would fall in accordance to that.
The big fear though is that if people are not out there buying homes then property values could fall and a portion of the home owner could wander on their mortgage which is where they owe, more oh the house then when the home than when the home was actually with and that could cause a wave of forbearance across the US. But how choose are we to seeing something as cosmic as this. Well we cab begin by looking at Red fang whose one of the leading real estate broker to go on and analyze and buy and selling datas boy yes you might be able to argue that there are a little bit bias because the entire business model revolves across real estate, but the truth is the business model actually revolves around transaction volume Meaning that Rick doesn’t care if values go up or down all they care about is money that people are buying and selling.
Plus they’re able to gather a ton of data and we can use that to our advantage to figure out what’s going in the broad market and the results were actually pretty surprising, first they found out that Many of the trade we saw 50% decline inventing on the market compare to the precious year, meaning that 50% of sellers are choosing to hold off form listing their homes and not selling right now.