Something SHOCKING is Happening in The Housing Market

Something shocking is happening in the housing market and welcome back to Real Estate Mindset. You guys already know that today's video is going to be absolutely bonkers. Now, before we get into this week's Redfin housing market report, I'm first going to show you guys in six steps how to price your market, which I believe is one of the most important things when it comes to purchasing real estate. And again, after that, we'll go into the housing market trends. And don't forget, you guys comment below, like this video and share it. Step number one, you're going to want to set up your search. Now, if you don't have access to multiple listing service or MLS, you're going to need a realtor. I compare my housing market to the year of 2022. Under status, I'm only selecting sold data because a sold house represents a comparable and we need to use comparables to figure out the raw math. Now I've set in sold January 1st of 2022 to December 31st of 2022. And I've selected as far as a location and isolated that to the entire city of Kingwood. Now, if I wanted to get serious about buying a home, I would specify the subject property subdivision because we want to get hyperlocal. Now on the bottom, you can see that there are 516 comps or sold homes in Kingwood for 2022. Step number two is selecting all of the comparables. You guys can see I've selected 516. Now, again, if I wanted to get serious, I would only select comparable homes that had a 500 square foot discrepancy from my subject property. Now, after I've selected all of the comparables, I go down to stats and I hit tabular. Step number three, once that's done, it's going to issue me something called a market analysis that's going sold in Kingwood in 2022. Now I've highlighted the average size because size is super important. You guys, usually the bigger the house, the less it is per square foot, but you see the average size house in Kingwood in that year is 2,800 square feet. Now I've highlighted on the right, the price per square foot, and this is super duper important because with this information, you guys can calculate wedge or determine whether or not you're getting a good, bad, or great deal. You see here in Kingwood, the average home sold for $148.63 per square foot in 2022. Now that I'm equipped with that ammunition being again, $148 a square foot, step number four is going back to active MLS to set up my perimeters. So as you guys can see here, I've selected the active status and I've selected the city that I want to look at active listings. And if I really wanted to get serious, I would put subdivision information and not city information. You guys can see at the bottom that that has generated 114 active listings. Step number five is organizing those listings by price per square foot. You guys can see that I've set up 114 listings by the cheapest price per square foot. So the first comparable on that list should have the most amount of wedge. You guys can see the first one is $111 a square foot. It's about the same size as average at 2,897 square feet. That home is about $37 under the average price per square foot in 2022. So what I would do is I would multiply that by the actual square footage of the house, which would give me probably just top of my head, $90,000 in wedge. If I purchased that house, don't forget, I go to the teachable website and I download this form, which is number six, completing your subdivision analysis form. I've made that for you guys for free, just use it. And it will help guide you through a very toxic home buying process. Now that you guys understand how important raw math is the name of this week's Redfin housing market update is home tours rise modestly to start 2025, but that hasn't translated to more sales. Always overoptimistic. Redfin is not only are they overoptimistic. I've shown you guys multiple times that they are not using raw data. They are using proprietary information. And it seems like at least in my opinion, they are using the proprietary data formula and algorithm to create their own narrative about the housing market being more stable and stronger than it actually is. More house hunters are hitting the pavement as the new year starts, but I don't understand how that's possible when sales and everything else is down, but penning home sales are down. There it is. As average daily mortgage rates hit a seven month high. I hate to be Debbie downer here, but expect interest rates to be elevated throughout 2025. And here's the thing we want them to so long as prices go down for the homes that we're interested in purchasing. Let's read the weekly overly optimistic Redfin quote. Three of the four offers my clients have made in the last week have competed against other offers with competitive terms, like waiving all contingencies and releasing earnest money early. That's weird. Some homes are getting multiple offers within 24 hours of hitting the market said Emily, a Redfin premier agent in the Seattle area. And we're about to look at the Seattle market. And I'm going to show you whether or not what she's saying is true. And you guys probably already guessed it's not. Some buyers are getting serious about their search because they've come to terms with 7% interest rates. And they're worried that if they wait longer, home prices will just keep rising. And they're worried about that because they're talking to you. If they stop talking to you, then they should be worried about what really matters, which is the raw math and the raw data. But let's look at the Seattle housing market. As you guys can see here, the Seattle housing market is up exactly 0% year over year. And one of the primary determining factors in demand is the days on the market. And you guys can see here all the way on the right days on market is shockingly. It was at 15 days on market this time last year. It's at 26 days on market, which represents an 11 day increase year over year. So when we compare year over year, Seattle market is a dumpster fire. So that's case in point why it's so important to use raw data not tainted proprietary, creating a narrative data, raw data, and no emotion. Let's move on leading indicators starting with mortgage rates at 7.17%. That's your daily average that is up year over year from 6.7%, meaning that things are more unaffordable this time than they were last year. Now as far as the weekly average interest rates, you guys can see here they're sitting at 6.91% and that is up from 6.61% this time last year. When we're looking at mortgage purchase applications, I mean, this thing is really, really bad. Mortgage purchase applications, depending on who you look at are down right now, 15% year over year. And you guys, I hate to ruin it for you, but last year it was horrible. So right now it's even more horrible. When we look at Redfin home buying demand, the overoptimistic demand that is apparently up 2%, which is shocking because mortgage applications are down 15% and pending sales are down. You guys can see on the bottom there, Google searches for homes for seller down. So how the heck can demand be up 2%? And again, that's more math and that's more data showing you the proprietary way to calculate things seem to always be overly optimistic. When we look at this week's winners and losers, starting with median sales price, we have five Metro areas with the top median sales price growth. And that is a four week rolling average as far as median sales price. Number one is Milwaukee. And that is up a year over year, 19.5%. Number five is Nashua County up 11%, only one Metro area on the losing list, which is Austin, which is down 1% year over year. And here's the thing about Austin. Austin has been down almost three years straight, absolutely getting annihilated. Now, when it comes to pending sales, number one Metro area with pending sales right now is Anaheim at up 10%. We'll see what those wildfires do to that market. Number five is Montgomery County, PA up 2.7%. As far as the bottom five Metro areas for pending sale, number one, Orlando, Florida down 13.5% year over year. Number two, thank goodness, my home Metro area of Houston, which is down 12.3% year over year, Fort Lauderdale down 11.4% year over year. So congratulations, Florida, Miami is on there. I put a star next to that because Miami needs to chill out. That's down 11% year over year and Nashville, Tennessee down 10.5% year over year. Now, when it comes to new listings, good news. Number one is Washington, DC up 9.4% only, unfortunately. Number two is Phoenix up 9.2%. I wonder how those chip factories are doing out there. Virginia Beach at number three up 7.2% followed by Miami. Thank goodness, but only up 6.6%. Vegas, thank goodness as well, up 6%. Now I don't like the five Metro areas with declining new listings because guys, we need new listings. Number one is Newark. I can never pronounce that right. That's down in new listings, 23.6% year over year. That's not good. Detroit down 20% year over year. Also not good. Warren, Michigan down 19.7% year over year. Austin down. That's not good. 18.1% year over year. And surprisingly, San Antonio also down 17.9% year over year. Let's start talking about prices. And after I show you guys median sales price, I want to show you guys the three main factors that I believe we should be watching when it comes to what's going to happen this year. Now, again, it's hard to know when we're using data that's controlled by proprietary biasness and potentially dare I say greed, but really the three main things that we want to pay attention to are price cuts, days on markets and active inventory. But let's start with red fins, one week rolling average median sales price. Now, as you guys can see here, we ended the year. I was wrong. We ended the year up 5.5% starting the new year at 379,988. And again, you guys, that shows according to red fin that median sales price is up 5.5%. We started 2024 at 360. So we're roughly up $20,000, but I put a few questions there, which is, I wonder how much of the new home data that they added here is manipulating the median. And I wonder how much of this is just showing the upper end of the median. In other words, you guys, homes that are priced $800,000 and above those sales transactions are flourishing. But remember you guys, again, I put a note subdivision analysis and raw math when starting with price cuts, here's the good news. We are at a four year high for price cuts sitting at 3.7%. And again, that is a four year high for January days on market. And just like price cuts, we are at a four year high for January as well, sitting at, are you guys ready for this? 48.7 days on the market. And that is up 6.2 days year over year. Like the last two, this is a four year high for January sitting at an active listing count of 892,364. Now I'm wondering how much higher that would actually be if it wasn't for all of the synergy and motivation from the elections. Here's another good set of data, which is months of supply sitting at right now, 4.3 months of supply. That is also at a four year high for January. And I'm going to tell you guys right now, supply and inventory is going to go up as we make our way through 2025. Something really important to keep our eyes on is the trajectory of new listings coming to the market. We do not have a four year high here. We're actually down 2% year over year. So we're under 2022, the start of the year and 2024 places in Western North Carolina that were hit by natural disaster, Eastern Tennessee and areas that the wildfire has just impacted. Those are areas where we're going to see a steady increase of inventory. Let's take a look at demand now, starting with pending sales. Now pending sales are down again, four year low for pending sales. So how the heck can demand be up when we have a four year low with pending sales, 15% down with mortgage applications. This is why we can't use proprietary data. Pending sales is down guys. And we are at a four year low for January home buying housing payments, sitting at a payment. This is shocking of $2,525 in just about four years home buying mortgage payments. You guys have gone up about a thousand dollars. And in some areas, even more than that, especially when we look at the increases of homeowners insurance, property taxes, and special assessments from HOA, like the residents on East coast, Florida, that own condos are finding out nevertheless, we are at a four year high and mortgage payments for January, which brings us once again to Redfin home buying demand index. You guys can see we are slightly above 2024. So somehow slightly above 2024. Again, I don't know how that's possible. Maybe there was an election boost and maybe that election boost manipulated their algorithm. Now, in conclusion, moving into 2025, I'm going to say it again. Math is the most important thing after you've taken care of yourself, your credit, your income, your assets. Don't forget I've made a free home buying course in the description below. You can access that and your subdivision form protesting your taxes form. It's all there. All you have to do is put in the initiative, but I expect mortgage interest rates to stay in the six and 7% throughout the year. And I also believe that unaffordability is going to be a problem throughout 2025. Now, as far as specific Metro areas and price declines, I really think that's going to depend on the job market layoffs and recession. And let's not forget, unfortunately, you guys natural disaster. And I want to say one last thing. Remember, do not use your emotions to purchase real estate. Now, once again, you guys, if you can like this video, share this video. And if you learned anything at all, comment below and let me know what it was. And other than that, if you guys are out there investing in real estate, you guys already know, I wish you luck and I hope you win.