Forecasting the Future of the Property Market | 1-Minute Market Update w/ Martin Perdomo

Send us a text

Brace yourselves as we navigate through the turbulent currents of the real estate market. This episode uncovers the startling decline in pending home sales, a slump that has dived deeper than the depths reached during the financial crisis. We sift through intriguing market data, including a surge in mortgage purchase applications, a fall in Google searches for homes, and the baffling steadiness of asking prices for freshly listed homes amidst high interest rates and low inventory. Beware though, this stability isn't everlasting, and we're primed for a price drop sooner rather than later.

In the latter segment, we illuminate the rising trend of homeowners refinancing their mortgages to offset high-interest credit card debts – a strategic move considering the financial landscape. We turn the spotlight on some captivating data around active listings, accepted offers, and selling prices. To wrap it all up, we gaze into the crystal ball to share our insights on what 2024 and beyond holds for us – prospective opportunities, potential hurdles, and the real estate market's trajectory. Keep your ears peeled to this episode for a holistic understanding of our current standing and possible future.

Support the show

Introducing the 60-Day Deal Finder!
Visit: www.wealthyaf.media
Use the Coupon Code: WEALTHYAF for 20% off!

Episode Transcript

Speaker 0 (00:00):
Pending home sales drop to a record low, and it's
even worse than during thefinancial crisis.
Find out more in this week'sreal estate market update, but
before that, here's this week'smarket housing data.
Mortgage purchase applicationswere up 5% from a week earlier
and down 19% from a year earlier.

(00:21):
That's a big, big decrease.
Google searches for homes forsale is down 13% from a month
earlier.
The median asking price fornewly listed homes was $371,730,
up 4.2% from a year earlier,which is just interesting.
The way this data is presentingthis just shows us that, even

(00:43):
though interest rates are high,the demand and the shortage of
inventory still hasn't reallyput the screws on the pricing in
some areas and some pricepoints.
But it will.
I'm.
I'm assuring you that it willabsolutely hurt the market
eventually.
This thing works itself slow.
We will see an overall decreasein prices.

(01:04):
You have some markets that arealready experiencing it.
Just wait and see.
The median asking price ofnewly listed homes was $371,225,
up 6% from a year earlier.
The monthly mortgage payment ona median asking price was
$2,575 at a 7.29% mortgage rate,down $164 from the all time

(01:28):
high set a month earlier thelowest level in three months.
This is good.
We're seeing rates coming downand, by the way, as I record
this market update, the 10 yeartreasury is 4.22%, which is a
good day and a good time.
What's today's day?
Today is November 30th 2023.
Today is a good day to lock therates.

(01:49):
It's the lowest I've seen itall year, actually at 4.2% Very
good, so we're going to seerates come down even more.
Pending.
Home sales were down 6.9% yearover year.
New listings of homes for salewere up 5.8% year over year, the
biggest uptick in two years.
This increases partly becausenew listings were falling at

(02:11):
this time last year.
Again, to my point exactly,interest rates are going up and
now we're seeing new listings,which is really interesting.
Right, there was a movement ofhey, interest rates are low, so
these people that are lockedinto these interest rates aren't
going into 8% interest rate.
The problem is that we're seeingpeople's credit cards payments

(02:31):
going up because, remember,credit cards are not fixed debt.
Credit card is variable.
So as the federal interestrates goes up, your credit card
debt goes up.
So people, even though they'rein 4% and 5% interest rates
mortgages, they're going to gorefi to pay off that $20,000,
$30,000 credit card.
That's 24, 25, 26.
And in some cases 29%.

(02:52):
And that just makes sensebecause solid date, even at a 7%
interest rate, and now youdon't have that $700, $800 a
month payment.
That's killing a Americans withthose credit cards.
Active listings dropped 7% froma year earlier, the smallest
decline since June.
33.7% of homes that went undercontract had an accepted offer

(03:14):
within the first two weeks onthe market and homes that sold
were on the market for a medianof 35 days and 27.3% of homes
were sold above their final listprice.
So interesting data, I think.
Again I've been preaching this.
I think that 2024 is going tobe a really interesting year for
real estate.
I think we're going to see someopportunities and the data is

(03:38):
showing to that, although we'reseeing prices still 4.2% year
over year an increase in value.
This is good, but it can'tsustain for long If the interest
rates stay here.
Now we are going into anelection year interest rates I
am expecting interest rates todrop next year.
It's what the feds themselves,jay Powell, said himself and you

(03:59):
go to their website, you'll seewhat their own predictions are.
They are expecting to bring therates out when the rates go
down, guys, we're going to seeanother push of high values come
up, so prices are going to goup.
So this is something to bepaying attention to.
I think the time to buyproperty is going to be.
We're going to have a windowfrom now to second third quarter

(04:22):
of next year's when the Fedstart to lower.
The rates reported by CNBCpending.
Home sales in October dropped tothe lowest level since the
National Association of Realtorsbegan tracking them in 2001.
They hit the lowest level sinceit NARS began tracking this
metric in 01, meaning it's evenworse than readings during the

(04:43):
financial crisis over a decadeago.
Sales were down 8.5% fromOctober of last year Because the
index measures assignedcontract its most recent
indication of housing demand.
It reflects the buyers who wereout shopping in October, which
was when the popular 30-yearfixed mortgage rate shortly hit

(05:05):
higher than 8%.
So in October we hit thosehigher than 8% rates.
So it's seeing how bad thingsgot when we shot up this.
High Rates have since pulledback to around 7.3%, according
to the mortgage news daily.
The realtors continue to sayit's just high rates but still
very low supply of homes forsale, thus deflating activity

(05:28):
Depending.
Sales fell in all regions monthto month except in the
northeast.
They fell the most deeply inthe west.
So California, vegas, all ofthese places are getting budget,
are getting killed right now,which is where homes are most
expensive.
Sales were down everywherecompared with a year ago.
Tight supply and still strongdemand have kept pressure on

(05:49):
home prices, which not onlycontinue to hit highs but appear
to be accelerating, and they'regained.
The realtors noted that salesof homes price above $750,000
have been increasing simplybecause there's more supply on
the high end of the market.
So, again, opportunity,especially in the high end

(06:10):
market.
I believe there's going to beopportunities.
Actually, I believe now they'rethere.
They're there, right there.
There is opportunities in thatmarket.
So really interesting times,guys.
We're going through someinteresting and historic times
right now in the real estatearena and the business arena.
We've never had a Fed chairincrease rate by this much, this

(06:34):
fast, ever.
So I think something's bound tobreak.
We'll see what's going to break.
I think that next year the Fedwill have to bring rates down
because Americans will just be,they'll be hurting.
Americans will be hurting withcredit cards at the rates that
they are.
But then there's the other sideto that, guys.
Rates come down, rates start tocome down, then prices again

(06:58):
begin to go up.
So it just they have a reallydifficult job to do.
The feds do.
I don't wish to be them, that'sfor sure, because they have so
much, so much impact, so muchfinancial markets and how it
impacts everyday people justlike you and I.
And this has been your weeklyreal estate market update.
I'll see you guys next week,peace.