The Biggest Real Estate News In Three Years

If you're a real estate agent or if you're a buyer or seller in this market, we just got the signal. We are in the beginning stages of the real estate market recovery. That's right. This has been going on for three and a half years now. In March of 2022, rates went up to combat inflation. We had the number of transactions of homes basically drop. We're at a 30-year low right now, 30-year low in the number of homes that are being sold. And all we needed was rates to go down because we have so much pent-up demand. It's not even funny. It's a story how many first-time homebuyers we have. You can just go back and look at birth rates back in the 90s. We have more 30-something-year-olds than we've had in decades. And that's the age of first-time homebuyers, the number of trade-up sellers, the people with the golden handcuffs sitting in their homes with low mortgage rates that really want to trade up. They really want to get out. They really want to do something else. They've been in their home longer than they've ever really been in their life and they just can't move. Well, all we need is lower rates to unlock all that pent-up demand and that inventory. That is inventory. When they trade up, they're going to sell their home. So that is inventory. And all we need is mortgage rates to come down to unlock this. We all know this. And so last Wednesday, Jerome Powell did not change rates, even though he's been pressured by everyone, including the president, to lower rates. He didn't do so. He's like, well, I don't know about inflation or where it's going to go. And I don't know what's going to happen with the tariffs and what the tariffs are going to do and all this stuff. And I get it because he's not a really good position, because if he lowers rates and inflation comes back, then he made the wrong move. And so he's got to be incredibly cautious. So I get it in a way. Everybody who wants the market to roar is like, lower rates, lower rates, lower rates. But he's like, yeah, but if we lower rates and the market roars, guess what that equals? Inflation. And that's not where we want to be. And so it's like he's between a rock and a hard place. He can't win for losing, but he didn't do anything with rates. And then Friday, two days later, we get one of the worst job reports that we've seen in a long, long time. And it wasn't so much that July was really bad. It was the revisions of May and June that were absolutely horrendous. In May and June, they said that we got about 300,000 jobs combined, about 150,000 per month. When they revised it, it was about 30 or 40,000 jobs. So it went from 300,000 to 30 or 40,000 jobs. I mean, that's insane. And so when you look at the reality of how many jobs were actually created in May and June, and I'll show you a chart. I'll show you right here. This is a chart of the jobs report, number of jobs created each month. And you can see right here, you can barely see it on the screen. It's so small. I'm going to blow it up a little bit. You can barely see it on the screen. It's so small, 19,000 for May and 14,000 for June. And then last month was 73,000. You know what? That kind of makes me wonder is what is July? It makes me wonder, what is July going to get revised down to? If they were that far off on May and June, what's July going to get revised to? But this is a signal, ladies and gentlemen, right here for the real estate market, because we needed this type of news to get the Feds to start lowering rates. And when the Fed starts lowering rates, that's going to cause a chain reaction in the market that will hit mortgage rates on the downside. Now, how far are they going to go down on all this stuff? Nobody knows. We do know that they hit a 12 basis point drop on Friday. We do know that 12 basis point drop. Now, that doesn't mean anything. It's like, yeah, well, you know, they'll fluctuate up, I'm sure they'll go back up. Maybe they'll hit seven or something. I'm not trying to predict mortgage rates here. What I'm trying to predict for you is that this is the beginning of the recovery of the market. And markets move really slow. They're telegraphed. When the rate started to come up in March of 2022, the market didn't just go to the bottom. No, it took it a year to slow down. And then last year was extremely, 2023 was really slow. 24 was about the same. This year's ended up to be about the same as 24. Each year was a little bit worse, a little bit worse in terms of number of transactions. And you have some local markets that have gotten really hit price-wise. Austin's down about 20%. There's some local markets out there that are down price-wise 10 to 20%. And there's a lot of markets that are down five and 10%, et cetera, et cetera. And there's markets that are higher. And so the national medium price just hit an all-time new high last month. So nationally, we're still hitting all-time high after all-time high after all-time high every single year, which is what I predicted when rates started to come up. I said, yeah, rates are going to come up, but the pent-up demand is going to keep prices elevated. Why? Because homeowners are not in trouble. They're not desperate. They're not getting into any kind of financial trouble. We have the healthiest financial homeowners that we've probably ever had in history in terms of the credit score of mortgage holders, the amount of people own their homes free and clear, the amount of people that only own 50% to only owe 50% on their homes, and the mortgage rates of the actual mortgages out there overall are ridiculously low. We're an incredibly healthy, healthy place. But the deals, we're in a deal crash, a 30-year low, and it hasn't affected prices because homeowners aren't in trouble. Everybody wants prices to come down. Well, let me tell you something about prices coming down. Prices coming down in these markets like Austin and Miami and Cape Cod, Florida, and some of these markets where prices are actually down considerably, and when I say considerably, I mean 5%, 10%, 15%, or even 20%, I believe that we are at the bottom of those prices coming down, and we're going to start the recovery process right now. And this recovery process is going to take a while. It's not going to happen overnight. It's going to be just like the downside. It took it three and a half years to get to this point. Same thing here. It's going to take a year to really get going. It's going to take another year. This is going to be a slow-moving process, but this is the beginning. And why do I believe that this is the beginning? It's because we needed some news that would get the Feds off out of this keeping rates where they are position. And I'm not saying that they're going to lower rates in September. A lot of YouTubers and influencers and real estate guys are out there saying that because of the job report, that the Fed's going to lower the rates 50 basis points, 50 basis points in the September meeting, and they act like it's a for sure thing. I'm not convinced that they're even going to lower rates in September at all, as cautious as they've been. We did see wages increase a little bit, and that's an indication that we could get into inflation. So there are some things in the report that show some inflationary stuff. We had unemployment that was up. That's a sign that it's time to lower rates. Jobs was a really bad number. I can't wait to see what the July revision is. That's going to be something to sit on the edge of your seat about. But at the end of the day, I don't know that they're going to actually lower rates in September. If they do, I'm predicting a 25 basis point drop. And again, this will cause a chain reaction that will hit mortgages. I'm not really here saying or thinking about anything too short term. I just believe that this is the beginning of the shift back the other direction, right? And if we have a reduction of jobs and the number of jobs created kind of continue to not be so great, and we get into somewhat, let's just say hypothetically, we get into some kind of economic recessionary period when you look at GDP and unemployment and job creation, et cetera, et cetera. Let's say something like that did happen, which I absolutely do not believe is going to happen at all. But let's just say it does happen. That's just going to make rates go down even further, which is going to be great for the real estate market. Why? Pimped up demand and the fact that homeowners aren't in trouble. The homeowners are sitting there like, okay, well, I'm not in trouble. So if you can't pay what I want for it, I'm just going to keep it. Delistings are up incredibly high. The people that are taking their homes off the market, which means that we don't even have real inventory out there. We got people out there just wishing, and they're just not going to sell. If you guys saw the last existing home sales report for, I believe it was July, it might've been for June, you'll see that inventory dropped nationally. Inventory dropped. The number went down. So it's been going up and then it took a tick down. And that's because of a lot of this delisting that's going on. And when you look at the total number of inventory of homes for sale in America, you can go ahead and chop that number maybe in half in terms of true inventory. People who actually want to sell, we only come down to the price or need to sell. People just aren't in trouble. So can you blame them? If I'm not in trouble, I'm like, I'm not fixing to sell my house for less than what I want for it. And a lot of people are in that boat. And the people that want to buy houses that are priced out of home, see, that's the other side of the equation, the affordability situation. Well, that's why we're at a stalemate. The buyers, most of the buyers out there can't afford the homes, but the sellers aren't willing to come down because they don't have to come down. So now we're in this stalemate. And what's going to help that? Mortgage rates coming down. And we're going to see this tsunami, tsunami of buyers and sellers, inventory, great inventory hit the market. That's what's going to happen over the next six to eight to 12 to 18 months. We are headed towards a recovery. And because of this, and because it happened mid-year this year, I'm looking at 2026 as a great year in terms of recovery of deals, of transactions happening. I'm expecting like a four and a half million year existing home sales, which would be amazing. And hopefully get back to that 5 million mark the year after that, 2027. Now, what do you need to be doing as a real estate agent? Well, I've been talking about this for three and a half years, that you should take the moment when the market is down and really go all in on your business. Because let's face it, if the market's down, you got to kind of double up your actions to have the same amount of transactions anyway. So that's what we should have been doing anyway. But on the flip side, you need to take the people who don't want to do anything because the market is down and put them in your database and make sure you're building that brand. See, this is the brand expansion years. You expand your brand while the market is down, when the market rebounds, your brand expanded while the market was down. And then what happens when it rebounds? It just takes off and literally two, three, four, five Xs. And now guess what? Why do they know you? Because you are the agent that was making waves and making noise when the market was down. Everybody's going to remember that. They're going to be like, you know, even when things are really slow, that guy was out there. He was doing it. She was doing it. She was making calls, talking to people. She was running ads. She was making content. She was doing everything she could do to build her brand up. And now look at her, the markets can't come back and it's literally two, three, four, five, six, seven, 10 Xs per business. That's how you act. This is what I did in 2008. So I'm just telling you guys right now, this is the moment that you've been waiting for. It's not too late. It's going to be too late because if you wait till the market rebounds and actually gets going to actually start trying to take advantage of it, when do you take advantage? When is the best time to take advantage of a market that's going to surge? Is it before the surge, preparing, getting ready, making sure all your eggs are in the right baskets and really making sure that you can maximize the opportunity? Or is it when it happens or after it happens? It's before it happens and we're getting closer and closer and closer to the actual resurgence. And this is just one piece of data that shows that we are hitting bottom right now. I'm calling it. We can go back and look at this video in a year or two or three or four. I'm calling it right now. This is the bottom and now we're headed back up. And the question is, the only question is, what are you going to do about it? Are you going to sit there? Are you going to get in the game? Don't sit on the sidelines because you're going to do nothing but watch us score touchdowns.