원문 보기
all right we've got 10 minutes because I got a plane to catch and I gotta leave this door in 13 minutes so that'll give me three minutes to upload this sucker are you ready let's go we gotta talk about the economy recession and real estate all three of these in this video look we already know some data we already know that CPI has slowed in Consumer Price inflation has slowed to the lowest level in two years we can all agree on that we could agree that prices are still high but we can also agree that in America the Federal Reserve and the government doesn't care if prices are high the just care if prices are rising rapidly which they no longer are still high though so we're still stuck paying higher prices we also know that wholesale prices have cooled more than ever before in the last 35 months yeah that's one month shy of three years I wish I could have said three years and we also know we just had the biggest one week slide in treasuries since March of this year when we had the banking crisis and we just got banking earnings where we saw that consumers are still willing to spend and borrow and results are way better than expected so what could go wrong because at the same time as we're getting this data recession expectations are actually being revised Down the Wall Street Journal just conducted a survey of I didn't make the number up 69 economists and what did they find that the same economists who thought in the prior two surveys that we had a 61 chance of a recession now believe that has been revised it down to a 54 chance of recession which initially made me a little bit concerned because we've seen this image before take a look on screen now what do you see probability of the US in recession in the next 12 months and if you look over here on the right we can see this skyrocketing of recession to over 60 percent and then we level out at 61 percent and we just had a massive decline now what makes me nervous is not that we had this basically guaranteed recession during covet but look at this we've had this decline before in 2008 between April and September of 2008 recession expectations actually fell they fell from about the 70s to about 60 percent from April to September of 2008 and that made me wonder oh my gosh are we potentially just repeating the same mistakes so we're thinking oh things are euphoric again everything's safe after all consider the.com bubble we had a 20 rebound of the S P 500 from bottom up 20 percent three times before it was over it took 14 years to recover your investment in some stocks or just to break even it's scary so is potentially this time different from 2008 well I guess it not sure is probably still out on that but what we can look at is the one thing that continues to give markets hope and the one thing that's driving this expectation it's jobs which has a lot to do with real estate as well which is why we're talking about all of this together look at jobs data at the same time we saw recession expectations oddly fall in 2008 zoom in right over here to where the mouse is on the right in fact we can just pull this chart all the way to just 2008 let's get that Focus right on 2008 which is now over here in the middle and what do you notice you actually notice that jobs data was basically negative all of 2008.
get really inflation or recession expectations actually fell for the first nearly two-thirds uh the first three quarters of 2008 that's bizarre it wasn't actually until jobs data started recovering that we really confirmed we were in a recession this is of course because jobs data is an extremely lagging indicator and we could absolutely go negative with jobs data by this October November and now end up having a recession by the middle of next year the problem is most people seem convinced that if we have a recession it's probably going to be relatively nominal in fact GDP expectations for 2024 are quite positive probably because homebuilders are building like wild because there's a massive lack of inventory leading to a massive investment in residential fixed Investments that's a massive component of GDP and people keep spending GDP for quarter three of this year is expected to be 0.6 now so we're not looking at a recession starting in Q3 especially since the prior expectation was a negative point three percent that's been revised way up almost by an entire percentage point then uh what do you have you have one percent or a point one percent to the negative expected for the fourth quarter so you could end up getting a Q4 q1 recession but unless that's combined with a large lead of jobs loss our session is probably going to be super nominal recall we were losing jobs for almost nine months before we officially thought we were in a recession when Lehman Brothers collapsed in September of 2008.
remember this gray bar that says you're in recession is decided like two years later like we could be in a recession now without knowing it but the data doesn't align with it now like it did in 2008. who knows maybe we're still at like a 2006 and that recession's actually more of a late 2004-2005. who knows but what does it mean for real estate well it means for real estate people aren't anxious to sell their real estate and they're still buying real estate in fact what we're going through right now is probably known as a HELOC boom that is people have jobs they not only have jobs but rather than sell and give up their 2.75 or three or three and a quarter percent mortgage that's fixed for 30 years they're taking out a home equity line of credit soon we're going to see The Return of rental property lines of credit again relocks where you basically take out extra Equity out of your home and what does that let you do lets you go buy a vacation stocks boats cars RVs you name it it just lets you keep spending as a consumer now of course all of this makes us scratch our heads and wonder how is this not a massive debt bubble and the reality is it is but that dead bubble doesn't have to explode now eventually it will it could explode in 20 years it could explode in 100 years and our currency will eventually collapse at some point it could be a thousand years from now but current data doesn't suggest it's now which brings me to my thoughts on real estate currently take a look at this most of us understand that real estate is inventory based and inventory is massively low this year look at the 2003 level or sorry 2023 level of inventory we're at 762 000 homes compare that to where we were in uh 2022 we had about a hundred and ten thousand more homes on the market 2021 we also had about 100 about 90 000 more homes on the market problem is you started seeing an inventory Trend up at this point whereas now you're actually seeing an inventory Trend down now what's remarkable about this though is it's not just nominal inventory that matters it's actually the month's supply of homes that matters and this is pretty remarkable let me catch you up to speed we already know fact-based most markets peaked between March and may of 2022.
we hit a low in December of 2022 on prices not necessarily sentiment or your opportunity to buy deals but real estate has been cut recovering since January so prices have already started trending back up some areas are already positive year over year with home price gains but what's happening with inventory well first let me give you an example so you understand the concept very simple if you're in a market where there are 100 homes on the market and 10 homes sell per month how many months of Supply do you have well in this example you have 10 months of supply okay well what if we change the data and said all of a sudden inventory fell to 50 homes so inventory fell by 50 percent and then you actually now only sold two and a half homes on average per month I know we're not selling a half home okay but on average you're selling about two and a half homes per month well now all of a sudden if you divide these two what do you actually have you have 20 months of supply of housing so you can actually have less inventory but also significantly less competition to buy those homes giving you better opportunities to buy homes and guess what that is actually showing up as well we jump over here into the Redfin data center month supply take a look at this month's Supply is starting to inflect up now wait a minute Kevin months Supply also inflected up in 2021 and 2022 right yes but in 2021 or in 2022 inventory was Rising so obviously Mud Supply is going to go up if you have stable amounts of buyers and inventories Rising but what you actually have here is inventory is falling but month supply is going up that means more buyers are leaving the market then houses are leaving the market which actually means this winter could be a better time to buy real estate because you have more opportunities this is what we're watching for our real estate startup house act we've been saying for over a year now we plan to buy in Q3 Q4 and hint we just started Q3 probably September to December is going to be very juicy we'll see so I don't think they're going to be a lot of buyers the people who need to sell are going to sell and this might be the last moment we actually have really high interest rates if 10 year treasury is peaked now and they slowly start trending down we can maximize on big barriers to entry for buyers and low buyers on the therefore low buyers on the market even in a low inventory Market actually have a better time to buy deals better negotiating power so how does all of this potentially break apart well the one way all of this falls apart is if inflation expectations rise that's the only way this breaks apart people say Kevin the job layoffs are coming I don't think so I think most of the job layoffs of the repositioning already happened last year and it's really just a giant rejiggering a re-jiggering is basically always saying look we over hired during the pandemic let's lay off a bunch of people it's much easier to do that after uh you had uh you know after you have some economic turmoil because look if you're Microsoft and you're like look I'm firing 10 000 people that's really really politically unpopular and people will be like why and Microsoft is like well your performance isn't that great okay I'm suing you that's bad 10 000 lawsuits would be horrible obviously ten thousand people wouldn't Sue but hey if the economy is going into a recession I mean look at Economist expectations we're laying off 10 000 people because of the economy yeah all right they all get hired somewhere else we have a rebalanced market those people go on to continue spending so what is the one thing that can destroy the market at this moment well obviously there's a Black Swan but we don't aren't aware of a Black Swan otherwise it would be called a Black Swan it could be another banking crisis some form of other collapse I'd like to hear your comments on what kind of Black Swan there could be we talk about this daily in the course member live streams but you should be joining me in those make sure to join and use that coupon code before the 26th when we have a large expiration so buckle up for that but no folks it's actually the following it's five year Break Even inflation rates you already know this you already know that as long as this number continues to stay stable the FED can be relatively patient the fact that it started trending up a little bit on the right is why we got another 25 basis point hike and I believe that once this gets down to about 1.6 the Federal Reserve is going to cut I think it's very simple but if we get another runaway like we did over here in January or February expect rates to go to six to six and a half percent that's what's going to hurt the market but otherwise this is this is a market that I find very difficult to short I find very difficult arguments to say it is not the time to look for opportunities and undervalued stocks and potentially undervalued real estate if you can get your hands on some sick deals stay tuned I should be able to fundraise for my real estate a startup within the next 30 to 45 days we are so so close I'm just waiting for that SEC approval now and folks thank you so much for watching this video I hope you ] foreign
Comments 0