저자: Kevin · 외국인
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레나(Lennar) 분기 중 주택가격 9.5% 하락, 신규주문 급감 등을 근거로 주택시장 이중 하락(더블딥) 위험을 경고. 역모기지 업체 파산, 가구 형성 둔화, 임대료 하락이 구매 심리를 악화시킬 수 있다고 주장. 2023년 중반~2025년 사이 부동산 매수 기회가 올 것으로 전망.
다듬은 글
In this video, we'll discuss the " double-dip" housing market crash and what happened the last time we faced something like this. First, let's cover some of the scary stuff and start with some recent updates, and this is not meant to be a channel that spreads fear, uncertainty, and doubt. This is to report the reality.
I'm not making this up. I'm just the messenger here, okay? This is Lennar. Lennar said between Q3 and Q4, home prices fell 9.5% sequentially from our third quarter. That's crazy. Because if you drop 9.5% in one quarter, and continue to drop at that rate, that means house prices are dropping at an annual rate of 38%.
That was really really scary. And now it makes sense that in their last earnings report, they actually reported that the dollar value of new orders was down 24% with their pending orders down 23%. It's the second largest homebuilder in the United States and that's a big deal. They clearly saw a massive drop in demand.
Not only are they seeing demand cool very quickly, but I worry that we could end up with an overcorrection in the housing market, especially with the bankruptcies that are now starting to happen in the housing market. Consider this. Take a look at the reverse mortgage industry . Well, this is interesting.
If you are 62 or older, you can get something known as a reverse mortgage. And what usually happens is that you don't actually make payments on the house you live in. Instead, you get some sort of monthly cash flow , but your debt increases over time and the bank thinks you'll probably die before you spend all the equity they paid you.
But if home values go down and you outlive them , those companies go bankrupt. And what's happening now is that COVID is over, people are living longer, and home values are starting to come down. So, what happened to one of the largest reverse mortgage financing companies in the country? They just filed for bankruptcy.
Reverse Mortgage Funding LLC, which is more than 94 percent owned by Starwood, a large real estate company in the United States. This company, Reverse Mortgage Funding LLC, just laid off 80% of their staff. 400 people were laid off, leaving about 100 people, filing for Chapter 11 reorganization citing a worsening interest rate environment , the Federal Reserve's reduced ownership of mortgage-backed securities , and what was called a " perfect storm" of unsustainable business models .
Wow. We have seen reverse mortgages experience a decline in the number of issuances in just the last few months. If we look at an example, we are at half the rate of a typical 30-year reverse mortgage, or should I say a typical reverse mortgage origination . Much less than the level when we ended the year ending in September.
So, we're down about half in originations here. Fewer and fewer people are taking out these reverse mortgages . We see lending standards getting tighter. Lenders get less money. They suffered more losses. This is scary. Additionally, and before we talk about this potential double-dip, it's worth looking at the latest numbers so we can see, or at least try to visualize, what's actually happening.
One of the things we really have to pay attention to with real estate is not the idea of, oh , there's a housing shortage. What actually happened was a change in people's behavior. So, after the pandemic started, a lot of people left and started moving to pandemic cities, Zoom cities. Younger individuals are moving out of their parents' homes and living independently.
Far more people are entering the housing market, far more people are getting into real estate and home formation. So, we are seeing a massive explosion in household formation. This is a graph of household formation here. Now, I'm going to step aside for a moment so you can really see the magnitude of this graph.
Even though it looks like the legs are down on the right , let's use a different color. Let's use green. While this one looks just as bad as this one, and you might be able to just ignore it, you really can't. Because look at this . Household formations spiked to positive 5,000 on this chart, but actually only dropped to about negative 800.
So, while the chart looks odd here, this section actually has five to six times as many households formed as when we briefly rebounded to the negative side here. So, essentially, one of the reasons we're seeing such a massive increase in housing is because we have a large pool of household formation here.
And when you calculate the difference, the bottom, maybe you'll just subtract a little bit here. Now, we have a lot more houses taking shape. Good. But, what is the trend now ? And that's what we want to talk about, the current trends and what they mean going forward after all this craziness. The concern now is that household formation is trending downward.
And right now, we're kind of at the low end of 2016 and 17. We're not having as much household formation after the housing recession. That makes sense. You did see a housing boom around 2005 and 6 when house prices were sky high. However, the concern is that if household formation declines, then what you could actually see is a two-pronged attack on real estate prices.
Where basically what you do is you push rents down because fewer people are renting , that is, older people are living with younger people, younger people are staying at home, whatever it is, people are creating fewer households. But then, at the same time, prices are coming down because interest rates are still high, even though they've come down to about 6% from 7, 7 1/4%, that's still very high.
You are still 3% higher than where you were in December last year. So, when you see rents and sales prices both going down, you're actually in a bit of a downward spiral because now you're entering what's called buyer psychology, where buyer psychology gets messed up because one of the reasons people buy homes is because they think they can rent them out in the future for a profit.
But if the rent goes down, then they think, "Well, gee, I'll just rent a cheaper place." Although rents had risen, they began to turn downwards. And why bother buying a place with a 6% mortgage when you can rent a new place for less? And remember, the more rental prices drop, the riskier it feels to buy real estate.
The more prices fall, the riskier it feels to buy real estate. Nick, who I follow on Twitter, I think he's great. He's basically pulled some really great data from Redfin's data center , which I love using. He put it in this beautiful chart right here, and he shows us some of the price declines that have occurred from the peak in May to the median sales price in November.
I mean, we're at 18% housing collapse in Austin, San Jose, Oakland, Anaheim, Seattle, San Francisco, Boise. All fell between 17%and 11%. Vegas here is at 11.1%. These are some substantial price drops. And what's interesting is that today's mainstream media is still telling us that prices are actually trending up, not down.
And there's a reason for that. It's very simple. The mainstream media is still stuck on the idea that, “Oh, wait a minute.” House prices, if we look at last December, were actually lower than this December. "But what they're ignoring is the fact that it was trending up, peaking around April and May, and now we're in a terrible downward trend.
So, by the time we get to next May, we might be at this point, right? It 'll end next May, and then the mainstream media will compare May to May, and they'll say, ' Oh my gosh, we've had a big downturn here.'" And this is where I want to talk about the idea of a two-stage housing recession and what happened last time.
So, one of the first things that happens when interest rates go up is that home sales decline, like sales volume actually drops. Again, Nick has done a great chart that shows this graphically. But we already know that home sales are declining. What I really want to talk about is the last time we had a fear of a potential two-stage housing crash.
So the last fear of a two-stage housing crash was actually around 2011. And if you look at the housing or home price chart from St. Louis Fred, what you can do is change the chart to just show year-over-year change data. So all you need to do is go to the edit chart section here. We're going to change it to percent change from a year ago.
And here you can see how these two stages played out. You had a pretty dramatic decline in home prices from late 2005 to early 2009 when the Federal Reserve stepped in, reversed course, and started cutting interest rates like crazy. This is not a pivot. A pivot is when they slowed down the pace of their interest rate hikes or stopped raising rates.
flowers at all. The turnaround is when they say, "We've caused too much damage." " " We really messed up. "" We caused too deep a recession here. "" We will turn around. "You can see that actually or we're going to reverse course . You can see that actually happened quite close to the end of the recession here.
Their bailout essentially marked the end of that period. However, even though the Fed had turned on the money printing machine, what happened almost a year and a half after the Federal Reserve reversed course in the property market was that the buyer psychology said, ' Buying property is bad.' " Home prices below this black line are still falling.
And the lingering fear that home prices will continue to fall is compounded by first-time homebuyers' apprehension about jumping into real estate. Let me explain this briefly. This is something we've discussed in previous course member livestreams and in the wealth-building course linked below, but it's a big factor in psychology.
As a real estate broker, when people come to me, or used to come to me since I'm no longer serving clients, when people come to me and they say, 'Hey, we're thinking about buying a house.' "The level of fear felt by first-time home buyers was extraordinary. Now, things are euphoric in 2021 when everyone is saying, 'Let's buy a house.'" "Prices are just going to go up.
It's easy, okay? It's like buying a meme stock when it's going up. It's very easy . There's no pain in that. But typically, anywhere between 2010 when I was representing homebuyers and 2019, what I saw was homebuyers needing a lot of education, looking at a lot of different properties, understanding potential defects and deficiencies, neighborhoods, crime statistics and schools, everything.
What's the worst rental price we can get? What are the management fees? The diligence is incredible. And the diligence in 2010 and 2011 was also incredible, only coupled with people's fear that they won't be able to rent the property for the price they're paying. And people are afraid, oh no, what if housing prices keep going down?
Back then, we didn't see rents going down that much , so the rent issue wasn't as big a potential problem as it is now, because now when you combine the fact that we're seeing less household formation and rents are now trending downward, rents are spiraling downward , we're seeing the cancellation of the 'zoom town' effect due to the pandemic, you have the potential to create fear.
What if we have a double-stage housing crash? Where you basically see home prices drop by May 2023 between 15% and 25%. Now, all of a sudden, that's all over the headlines, and the Fed might bail out the market in March and May, but homebuyers are actually too scared to get in because they're afraid of a double-stage housing crash, and we end up with another year of double-stage real estate pain, until maybe mid-2024.
That's very possible. It's happened before, and it could happen again. History can be a good guide to real estate growth, or should I say, real estate pain, and you can see the housing price decline right here, exactly like we saw in 2006. That line shows a slowdown in home price growth. So, as I just drew, we're still in the red, but when we're actually in the red, even as we bottom out and start to rise again, the psychology of homebuyers might be so afraid of a potential double-stage housing crash that we could extend the window for buying real estate by at least a year, if not more , even as interest rates fall.
So, think about that. You could have a supply of homes that's Low prices, low homebuyer formation, falling rents, and falling mortgage rates, yet home prices remain low or continue to fall due to the stubborn psychology of the real estate market . This is much slower than the stock market. I mean, when the stock market is in the green for five straight days, everyone says, "It's over, we're going to go big!" "Right?
It's very different in real estate, especially since it takes a long time for prices to truly reflect market changes. So, anyway. Wow. Get ready. There will be incredible opportunities to buy real estate, I believe, probably starting in mid-2023 and potentially through 2025. So, get ready, get ready, and good luck. Stay safe. Thank you. Goodbye.
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