Ground Zero for the 2025 Housing Collapse (Watch This City)

The Florida housing market is crashing and the signs of a nationwide spread are now impossible to ignore. Anyone still in denial is choosing to overlook the clear data. Today I'm going to show you proof of this crash and what it means for the rest of the nation. But before I begin I want to quickly emphasize the importance of Florida in the real estate world historically. It was here that in 2008 the big crash started. That is no coincidence. As prices began to fall, Miami especially served as the canary in the coal mine, offering the country a glimpse into what would later unfold into this in 2009, 10, and 11. Today we're seeing evidence of this phenomenon happening again in pretty much the same exact spot. And just like last time, while it looks contained to Florida, this crash is likely spreading elsewhere as we speak as the national housing market comes to a complete stop. We begin this story by zooming in on Florida's Gulf side and examining the city of Fort Myers. Here we can begin to see this clear evidence of a crash. You see, back in 2020, one could buy a typical Fort Myers home for around $230,000. Keep in mind that at the time, the average mortgage rate was around 3.2%, which means that a buyer looking in this market would have been able to easily purchase a home for around $1,300 a month. That figure included typical insurance, HOA, and taxes. That's the all-in amount. Now we all know that 2020 changed everything, and you can tell from the chart that the Florida housing market was no exception. In this tiny two-year window following the pandemic shift, prices began to move up in a way we had never seen before. A true bubble developed. 24 months later, this super bubble began its first test. The market backed down, and prices at one point in early 2023 looked like they were headed into a spiral. But following in the footsteps of the stock market, home prices refused to budge and began a long sideways pattern that persisted until early last year. At this point here, that same house that went for $230,000 or $1,300 a month was now $417,031 a month. A wild reality that makes 2020 feel like it was 30 years ago. Then earlier this year, things took an even more interesting turn. While in many markets in the Northeast and Midwest, real estate prices were still heating up, home values in Fort Myers, for example, began falling, standing out as one of the only markets in the U.S. with observable declines. According to Zillow, from January of 2024, the typical value of a single-family home in the area has dropped by $30,000, a decline of around 7%. While this may not seem like much, it's direct evidence of a massive tidal wave when looked at through the lens of historical housing dynamics. In real estate, once prices begin falling, it's very hard for the situation to turn around. The direction is sticky, and markets often act as a self-fulfilling loop. The interesting thing is for the last 15 years, the real estate market was largely dictated by purely rates. Lower rates meant higher demand, and higher demand meant higher prices. Without wider economic challenges like unemployment, the real estate market operated in a sort of walled-off garden, functioning in one of the longest bull runs in economic history. Today, for the first time since 2008, many are starting to sense that we could be entering a situation where the unemployment rate and other economic conditions may start to heavily weigh on the market. You don't have to dig deep to find evidence of this. Look no further than homebuilder stocks if you want a glimpse into investor sentiment. Lennar Homes, for example, the second largest homebuilder in the nation, is down about 42% since the most recent peak in September of 2024. This means that in just the last 6 months, this stock has suffered losses that are larger than the drawdown we saw in 2020 when it was believed that the entire economy was shutting down. Outside of 2008, this most recent collapse is unprecedented, showcasing the sheer change in market sentiment over the past few months, and that's not just a market move, it's evidence of something bigger. With the market now coming to terms with these new tariffs, the entire global economy is essentially resetting, and with this reset, there will come massive economic pain. We are already seeing this in these massive stock market moves, but this could very well just be the start. We haven't even gotten the earnings yet to truly get a sense of how bad this could be. With a 125% tariff on China, this 19% decline in the S&P 500 could easily double, and within months you are almost certainly going to get a massive wave of layoffs and rising unemployment if that happens. I don't think anybody captured the seriousness of this situation better than Dan Ives. Take a listen to this quick clip where he lays out what could happen if these tariffs remain in place despite the recent pauses. is that I don't think a lot of tech companies are going to give guidance in terms of one cue, and I think baked in here has already caught five, 10% cuts off the bat in terms of growth. If this stays, it ultimately, look, this becomes a black swan event. You're playing with third rail issue here. Is that priced into these stocks, if we see this kind of magnitude of decline hold today? No, because obviously with China, they're not going to lay down. Right, they said this morning 34% tariffs right back on US goods. Of course. And then I think it also comes down to the tariff chart, which continues to be a sci-fi sort of comedy show, those are not the right tariffs. So it starts with what's the number you actually even start with in terms of negotiations? And the longer this stays on, you can't stop a snowball from once it starts. So the point is, like, do you burn the house down, but you still have a bagel in the toaster oven at the end of the day? And I think that's the frustrating thing right now for tech investors. Stocks are not Republican or Democrat. They speak volumes to what they're showing you. And I think that's the problem. But this is a video about housing, specifically Florida housing and how the crash there will spread to the rest of the country. And you might be asking, what do tariffs or the S&P 500 have to do with home prices? Well, it's simple. Even before the tariff talk, as the S&P 500 was hitting all time highs and the unemployment rate was at all time lows, we were already seeing weakness in the Florida markets. High inventory and declining prices. Now you add unemployment and a recession to the picture and you will get another 2008. And with one state, many more will go. Sentiment spreads. And as the economic vibe shifts, so does buyer and seller perception. This loop begins to enter other markets. And while the decline may not be as serious as it was in 2008, the overall housing market will follow this pit. We are already seeing investors predict this via the stock market, specifically in the home builder category. We can look at pending sales, sales prices, inventory permits. It doesn't matter. There is no better leading indicator than this right here. The sentiment felt within home builders on Wall Street. Investors tend to be ahead of the game. Just a quick read of the most recent earnings call transcript by Lenar showcases this exact issue. Keep in mind, this report came out before the most recent round of wild tariffs by the new administration. Yet despite this, it had already become very clear that things in the housing market were changing rapidly. I'll just read you this one quote that really showcases why so many are worried and it says the following. Across the housing landscape, actual demand has slowed materially as affordability and credit remain challenged by limited down payment funds and high personal debt levels. More recently, even consumer confidence in job security has been called into question, further straining the desire and ability to transact. In other words, even if rates go down slightly, people are still too broke, too indebted, and too scared to buy. Now add a near flash crash to this theory and you have a complete collapse. This is once again especially true in the Florida markets where Lenar was specifically quoted acknowledging the extreme weakness. In general, home buyers in Florida and Texas, our two highest volume states, needed more help than most other markets around the country. We needed more incentives in the Florida and Texas markets to assist buyers. Going on to say, as we move past the beginning of February, we did not see the seasonal pickup typically associated with the beginning of the spring selling season. So there you have the outline. We have unusual weakness and observable price declines in Florida, while at the same time the entire global economy is going through its biggest shock since 2008. You can guess what happens next. Thank you guys for watching. As always, please make sure you hit that like and subscribe button if you enjoyed it and don't forget to leave a comment letting me know what you're seeing on the ground in Florida this year.