08/15/2024
READ IMAGE, THEN READ THIS. 🙄 . . . IT MUST END ❌
1. Too many in our space allow the media to gas-light them into thinking the market or economy is great;
2. Too many have their “heads-in-the-sand” and lay-and-pray . . . hoping things will get better;
3. Too many DO NOT perform their own market research NOR do their brokers who SHOULD be leading from the front;
4. Too many are not being proactive based on the data below and remain reactive;
5. Too many do not understand real estate IS a market . . . it ebbs and flows . . . goes up and down;
6. Too many were not there during the ’08 crisis, so they have no beacon . . . no perspective;
7. Too many ONLY know how to play in the retail side of our space, so when the market corrects, they suffer BIG TIME.
All said, allow us to shed light on the pure ignorance of blurting out a statement like in this POST, especially one that is NOT supported by any data, whatsoever.
First, let us begin by stating we know the author of said post . . . good guy and we respect him for what he’s done in the space. This is NOT an attack on him at all, but strictly to the gross oversight within our industry.
Second, we want to preface the below by stressing that NO ONE wants to be in a recession or see the real estate market crash, but we are here and IT’S HAPPENING, so we must put our boots on and get to work.
REMEMBER when they said, “The market is great, we just need more inventory?” And, when I say THEY, I mean the MEDIA and NAR.
Did you ever think about how a false-narrative can lead to big revenue? Media = advertising dollars. NAR = due$.
Despite the REAL data behind the curtain, they continued to stoke the fire, gas-lighting the masses and filling their coffer$ along the way.
And by the way . . . how’s this statement aging thus far??? “The market is great, we just need more inventory?”
Well, we can tell you, NOT GOOD. Year-Over-Year, State of Florida inventory has INCREASED 80-90%. In fact:
35% of Active listings are 100+ Days On Market (DOM);
35% of Active listings have seen price drops;
25% of pendings have gone back active;
45% low on Mortgage Applications
The U.S, collectively, has lost 288 BILLION in equity since 2nd Q of 2022.
Let’s talk about the economy, which drives our space.
For starters, this POST claimed NO recession. Well, NEWS FLASH . . . we have, technically, been in a recession since Q3 of 2023.
Definition of Recession: “Two consecutive quarters of decline in a country’s real (inflation-adjusted) gross domestic product (GDP) - value of all good and services a country produces.
Once again, there are many in our space that allow the MEDIA to gas-light them in to thinking different, instead of doing their own research.
Historically, two negative quarters of GDP has been the definition of a recession and has been widely known and accepted by financial authorities, UNTIL the Biden Admin took over and Janet Yellen decided to play games and play dumb . . . as the masses drank it up.
So, now that we are already here, what is driving said RECESSION?
- Historic high Consumer Debt. Yes, student, auto and credit card debt is 5x, 6x what is was in 2008.
- Savings in the US has dropped 1 Trillion dollars; super low.
- The auto industry is seeing their repo market explode
- Inflation is through the roof
- Interest rates are still high enough to keep buyers priced out of market.
- Increased insurance policies
- Increased property taxes
- Increased HOA dues/assessments
- Unemployment has increased; up 14% year-over-year
If you think employment is strong, then think again. Many of the employment numbers are: part-time jobs, 2nd jobs or government jobs.
But, aside from that, we already know what your’e going to say . . . “IT’S DIFFERENT THIS TIME!”
Migration, Equity and Tighter Lending. 🙄 Got it.
MIGRATION: Here in FL, we have seen higher levels of Migration in the past and ’08 still showed up. Plus, many of the zip codes w the highest migration, NOW have the highest number of vacant properties
EQUITY: is dropping. Simple economics is already showing that Buyer demand is Way DOWN and Supply is WAY UP, so what does that equate to? Correct, prices FALL. And, as shown above, it’s already happening with 288 billion lost thus far.
TIGHTER LENDING: Yeah, not so fast here, either. Since 2019, roughly, 1.7 million loans were written 5-year arms. Just in case you forgot . . . it’s 2024. In some documented scenarios, mortgage amounts WENT UP $2000 on top of their existing mortgage. How many of those homeowners will continue to pay?
If the above feels like you are a speed-bag, then just focus on this . . . the most basic metric/equation to consider:
Home values went up 50%. Incomes ONLY went up 5%.
Is there anyone here that feels incomes are going up 45% to match the home value increase? Anyone in here feel the above DATA provided is going to heal overnight?
We have a recipe for disaster here and we as licensed professionals MUST stop drinking the kool-aid spoon-fed by the media.
YOU ARE BEING GAS-LIT bc they know you will drink it in. They know you just want to feel good in the moment, instead of DEMANDING those responsible for our economic policies to produce real results. .
Well, in real estate, this is our business and we do NOT sit and wait. We take action at Investor Agent.
At Investor Agent, we follow the bread-crumbs . . . we constantly read the tea leaves and are ALWAYS looking ahead . . . down the road. Too many in this space can only see a foot in front of them and their RE businesses, unfortunately, will suffer greatly.
We saw it in 2008. MANY of the largest brokerages/teams went belly-up and it will happen again. 😢
Nationwide, 33% of all licensees were out of the business during 2008. A close friend stated that that number was closer to 60% in Jacksonville. 😢 Will that be you?
The ONLY way our industry heals is for prices to fall, so Buyers feel the appeal and pull the trigger and buy, thus bringing harmony back to the space. Right now, Buyers are just priced-out of the market.
Buyer Demand ⬇️
Active Supply ⬆️
Home Prices ⬇️
The math is really that simple, but you must take action and lay the tracks for tomorrow.
During the ‘0-8 crisis, our little brokerage averaged 40-60 closings a month.
How did we do it? Follow us on social, as we are just getting started.
-RH
