Folks right now, we are going through the fastest deceleration of home prices in for decades and many analysts think that we are about to head for the fastest decline in home prices in four decades to match. Yes, the borrowing costs that are going up faster than they have in four decades. As Bloomberg reported this morning, we've shifted from some of the most insane upward appreciation over the last few years to the first drop since 2012. this was actually the fastest home price deceleration in the history of the much cited S P K Shiller index.

And as borrowing costs continue to go up and the global economy continued to worsen, you can only imagine the pain that is coming for this housing market and we're going to go through exactly what you need to know in this video. and this video is brought to you by MooMoo and the up to 15 free stocks that you can get if you sign up and deposit with them using our link down below. Australian Viewers can get up to 50 Australian dollars cash back. Okay, so Seattle Net reports quote The experts told us not.

You call the recent dip in real estate price growth a crash. Median sale prices are simply leveling out to their pre-pandemic Norms They said Welp a new report from Redfin is making that a much harder sell. Here's the data set released from Redfin showing the U.S housing Markets cooling. The fastest number one they found is Seattle Washington.

With a percentage change in price per square foot dropping 17.7 percent, year-over-year inventory up 114 year-over-year the percentage change in price drops is 17.5 percent, drop in pending sales 22.5 percent Number Two: Vegas With price per square foot down 14.5 percent, inventory up 89.5 percent year-over-year in terms of price per square foot, you have San Jose down 17.6 percent San Diego down 15.8 percent Sacramento down 17 percent Denver down 12.2 percent Phoenix down 14.5 percent and Oakland down 20 Some of these in terms of change in inventory: Tory you're seeing 20, 30, 40, 50 even a hundred percent change in inventory year over year, you're seeing a massive increase in inventory in these particular markets, a huge decline in people wanting to buy, and a resulting substantial drop in price per square foot. And this is just the start folks. In fact, across most of the country, most real estate markets have held fairly stable. So far, you're only starting to see those bubble.

Those bubble markets start really cooling off. but eventually as these rate hikes and as this monetary medicine works through the economy, it's going to hit everything. According to Fortune quote, we're already starting to see home price declines in bubbly housing markets like Austin Boise and Las Vegas. However, home price declines have yet to hit the whole country according to Zillow, just 117 markets saw home price declines between May and August and another 500 plus housing markets prices were either flat or Prices rose.

Now, if you look at some of the official data that just came out on different housing markets in the United States which is a little bit more laggy than the Redfin data, but still very, very indicative and maybe a little bit more indicative. Pretty much across the board, you're seeing a drop except for an East North Central. You're seeing some pretty damn big drops in the Pacific, but almost in every Market, it's either flat or going down and Contracting right and again, this is the most recent data we have, but it is lagging. Imagine what it's going to look like when you see the August report in the September report because rates have consistently gone up.

Since then, things have gotten even worse and as we go towards the end of the year and into 2023, things should get even more bad. The real estate experts this time last year said, hey, there is no way no matter what the FED does that real estate sees any sort of noticeable drop because there's just such a big housing shortage. But what they don't talk about is the massive, massive demand shortage that the FED is creating. He is killing a lot of the buyers that would have been eligible to buy a lot of these houses by raising rates to such an extreme degree.

And this is all intentional. It's all a plan collapse at the FED meeting last week. Jerome Take your wife, take your house, and kick your dog Powell said that he EXP backs a correction in the real estate market. A tough correction.

What we need is supply and demand to get better aligned so that housing prices go up at a reasonable level and at a reasonable pace and that people can afford houses Again, we probably in the housing market have to go through a correction to get that back in place and the Fomc participants expect restrictive policy to continue for years. The longer this restrictive policy goes on, the more pain and the farther real estate prices have to drop. Now one of the arguments against Real Estate Price declines is that hey, you know 85 percent of homeowners with mortgages have a rate far below today's level. A factor that could prompt a lot to stay put.

and certainly so. I Mean if you're someone who has a locked in mortgage at three or four, or even five percent, what are the odds that you want to sell your house and lose your low rate to go buy a new house at a seven percent mortgage rate? Probably slim chance you want to do that, and that is an undeniable limitation on Supply A lot of people are going to be like, okay, I'm just going to hold on to my house, but you also have to keep in mind that that was true for all of of these markets as well. And yet you're seeing substantial, substantial inventory increases and a big reason for that is quite frankly, that inventory was so low during the pandemic that even to double or triple inventory is still not that much, but has a huge impact on market prices. And even Supply aside, if things just stay consistent over there, home prices are made up of not just Supply, but also demand.

and the FED is doing whatever it can right now to completely and utterly nuke demand. We are already at borrowing rates where you'd have to be really, really crazy to take out a loan at these prices. Even if you can refinance four or five years from now. It's still ridiculous.

and if you're a cash buyer or somebody willing to pay these higher mortgage rates, you're certainly going to wait until prices go back down to their pre-stimulated valuations. People aren't stupid enough or even can't afford to pay high interest rates for low interest rate pumped valuations. Now, according to Ian Shepherdson, Chief Economist at Pantheon macroeconomics, U.S home prices might well be about fifteen to twenty percent Overvalued, indeed. Over the past four months, single home listings have risen 40 percent while sales have sharply declined, meeting conditions for a potential market-wide pullback.

And if you go over to Goldman Sachs the Sacks over Goldman They say brace for an even bigger housing downturn In terms of how long this is going to last, let's go over to Mark Zandi from Moody's Analytics Zandy Believes the housing market is already in a correction which could increase home Inventory as the volume of sales declines. He said there are now 210 out of the top 400 housing markets across the country that are significantly overvalued or overvalued by more than 25 percent. He says I think this will play out over the next couple of years and it will be through mid-decade until things bottom out. So here he's saying you have more than half of U.S markets significantly overvalued by more than 25 percent and he thinks the Market's not going to bottom until mid decade 2025, 2026..

Now to cap off this video with some final thoughts: I Believe that the calculus on this current situation that we are in is is actually pretty simple. As long as the FED is trying to solve inflation and reprop up the dollar, pretty much every other asset class relative to the dollar is going to be bludgeoned. and as long as the FED is committed to going through with years of restrictive monetary policy that ends sometime after 2025, we should continue to see damage in asset prices, right? I Do at the same time to hold the belief that we're heading for a pretty hard landing and by the time we hit a hard landing and inflation is meaningfully down and unemployment is meaningfully up I Think the Feds get a pivot and you're going to see some insane deals, But for right now, we just got to ride the waves and store up some cash Anyways, folks that caps off today's video, make sure to hit that ravishing like button and subscribe if you want to get up to 15 free stocks with MooMoo I Will put a link to them down below. If you want to sign up with Zip Trade review and get access to our step-by-step license, private chat, daily morning briefings, and full price.

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