New Home Market COLLAPSING Under STEEP PRICE Cuts!
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- čas přidán 13. 07. 2024
- Right now the new home market is a preview of what's to come for the existing home market when we start seeing inventory become balanced once again. Even with huge Price cuts and much lower interest rates, new homes are still having a hard time selling. Yet people think that as soon as interest rates fall for 30 year mortgages that buyers are going to rush into the housing market.
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Why is there so little home inventory on the web site called "For Sale By Owner?" Don't people want to avoid the over-inflated costs of traditional real estate transactions?
Falsely raise the price 400% then cut 25% and then you call it a crash? Come on man
I see you at the beginning😂
beatyfull car
New homes builders know the game, they raise initial price by an additional 25% and then they make a special offer of 20% reduction. What a deal. Smoke and mirror game.
Yep, they aren't making record profits by selling at a loss.
@@dademack3544 one of the large builders in CA stopped building in CA due to the fact that they were loosing 80k a home on the last tract. They would have lost more if they stopped building so they said we are finishing these up and NO MORE.....
How much is it to build a new house 🏠. Maybe $60k for 1,400 sqft.
Exactly my thoughts. New 300k house is more like 240-250k.
@@marilynh5487No. Minimum build cost (region permitting) is going to be $100/square foot.
Prices better crash way more than 10% considering most homes have been flipped for double or more in the last 2 1/2 years. 30% - 40% is more like it. Even then, the interest rates are still going to be too high.
%40 is the correct number.....vs the current rate......no.....more like %50.....to equate.....towards normal...
Not gonna happen.
@@jameskozlowski5496 Crystal ball mcgoo over here lol
You are a smart and rational person. Spot on.
It’s not the interest rates that are too high. They’re normal. It’s the prices that are too high!
the house prices are "correcting" and they need to correct much much more
I'm wondering how a 20% reduction is a crash when the housing market went up over a 100% in the last 4 to 6 years
well if it went up 100% it only has to go down 50% to be back to even. In the investment world we call that insidious math.
Michaelnomics!
It’s just my opinion and it hasn’t gone up 100%. It went up 40%.
100% 😂😂😂 what lala land you live in
Laughing in ignorance. I have seen plenty of homes that were jacked up over 100%. So would you if you bothered to look, speaking of lala land. @@dariodjakovic1600
The home prices cut by about $33K- $39K are not impressive. Wondering if we'll see prices cut by $100K.
percentages are all that matters and new construction prices are down 20% this year. Add in the "buyer incentives" and it's more like 25-30%. It's close to the national average price crash from 2008-2012
Most houses will go down over 100k in price, if not more.
$89k yearly tax bill...😮😮😮
That's insanity!!
I know!!! Who would want to own anything with that type of yearly tax bill? If you bought that house, lived in it for just 5 years, sold it then..you would have to include 89k x 5 and add that to your asking price or you would be at a loss
Yep, clear indication of the magnitude of the wealth divide in this country.
I know people that look at that amount as change. The amount of rich people out there is crazy.
I don't understand how these homes can sit empty, meanwhile the owner is paying a huge tax bill, is it just for a tax write off?
That property is on the bay and is geared towards a multi- millionaire. 89k is like 5000$ to them.
Funny hearing her, because if you go back to 2008 and 09, Barbara Corcoran was saying buy buy buy! The housing market can't go any lower!! See how that turned out
That is so criminal
What's wrong? Buying in 2009 was a very good idea. Low prices and low mortgage rates. 2009 was a great entry point.
@@pierrek5260yeah I agree. If she was saying buy buy buy in 06 or 07 then yeah you’d have been screwed. 09,10,11 were great years to buy.
$30k price cut doesn’t do much to bring down the monthly payment at todays interest rates. People mostly look at the monthly payment because if you can’t afford the monthly, doesn’t matter how much the builder cuts the home price if the monthly payment is beyond your budget.
And yet where I live (Northern VA) crappy home come to market overpriced by $40K and then gets sold within a week. I am talking about a 1977 townhome 3 bedroom, 1750 sqft for $540k.
@@Fred-Faizi Yep, the Northern VA market is crazy but at least salaries are good. I still have property there and the sharks call me every week wanting to buy. I bought my first townhouse like the one you mentioned in Springfield in the 80s for $100k @13% interest…house selling now for over $500k.
realtors, most, have the ethics just shy of a used car dealer - according to most realtors, it's always a good time to make their commission, err, a good time to buy. they only care about their commissions
For sure
I’m not a realtor but I have changed my predictions. I have been waiting to buy since 2021 and that has gotten me nowhere. I should have listened to people saying buy back then. Now we’re all screwed. I hope I’m wrong but I bet I’m not. The fed dropping rates is just going to start the rabid demand again and homes will go up. It all doesn’t matter that the economics don’t make sense. People will continue to put their lifestyle on cc, job hop to bigger salaries, and never pay the piper. Election year will obviously be manipulated. If Biden wins again it’ll stay high. If he doesn’t, then magically everyone will pull out and there’s your collapse.
I need to see at least 50% reduction to get my attention.
Lol. You will probably be a renter for the rest of your life. Keep in mind homes where builders cut prices significantly have some sort of location issue or is just not fully developed with support facilities. Areas where there are good schools, close to employment centers, fine dining and shopping facilities, entertainment option, ect, you will have a small window to jump in and I can guarantee it won't be 50% off.
@@jamesstovall1839 you might be right. You also might be wrong. Sorry junior, the pendulum swings in both directions.
@@emilo81 I'm a builder and have been in the real estate business for over 30 years living first in Los Angeles and moving to Dallas in 2008 and the one thing I will tell you from my experience is that I may not be right initially, all of the acquisitions I have made have proven to be very good when looked at over a 5-10 year period. These doom and gloom guys on CZcams want you to look at real estate likes its a day trade. Buy the most house you can afford in the best location possible keeping in mind the path of growth in your City and in 10 years in most cases you will look back and laugh at the guy telling it was better to rent. I still own a home in Woodland hills Ca that I helped my now wife to purchase in 2006 for $550,000. That was a crazy price for a 1,100 square foot home at the time. Guest what that home is worth $1,000,000 today and there are people in the market who can pay that. Stop having this mindset that everybody is broke.
The sad part about this video is that all of those workers, who've worked their asses off and are the backbone of the economy, are about to be fired. This isn't about the "economy." This is greed, from stock buybacks to unquenchable bonuses for CEOs and executives to shareholder returns. Fire workers. Buy back stocks. Lobby Congress for subsidies and tax cuts. Watch the stock price go up and up. Workers be damned. During the UAW strike, every car manufacturer was bitching that raising wages was going to bankrupt them. Then "after" the strike was settled, you'd expect companies like GM to “file for bankruptcy”... because that's what they said. Nope. Instead, GM buys back $10 billion worth of stock for shareholder profits, for people who've done jack sh*t for the company. All of these companies Michael mentioned that are laying off workers are from companies with weak to no unions. The rich get richer. The poor get thrown to the streets. This is the American way.
No No this is not the American way this is the Biden way.
You must be joking if you only think its Biden and Democrats. We live in an oligarchy and have for some time now. The parties could care less about you, me or the average person. @@MM-ig2zq
I agree, and I feel that greed in America and especially the real estate market is ten fold. Middle class and working class people can not compete or participate in a market that caters to upper middle class and wealthy people. It’s terrible.
@@MM-ig2zqeverything they said has been true for every president in our lifetime. That's only possible because they've tricked you into saying "go red team" or "red team sucks" so you're too distracted to see what's happening
It's all about... "You will own nothing and be happy!"
What she is saying is, don't do your due diligence, don't look at the increasing costs of insurance and taxes and the negative potential for the job market.
Pretty much
New home prices being cut by 30%? Makes you wonder how much profit they were trying to make in the first place. If you get into an area where the large national builders have inventory you can get deals but when the inventory is gone things will settle down.
@fckytbAdsgood rant
always been true.
Amen dude. The whole system of housing is a joke. Its just a way to keep people working.
$50 sq foot should cover materials costs
Unfortunately prices are going to continue rising. People here are crazy paying these prices
NOT ENOUGH of a cut.
True...I won't even get out of bed for a 10% price-reduction or sale on ANY product, let alone home prices. It's got to be AT LEAST 30%. Now, if I may, it's nap time...again. ;-)
As for MY area of interest -- Colorado Springs, CO -- home prices there ARE going down as many listings show regular price-reductions...but as said, they need to go down more. Plus, I need an interest rate WAY less than 5% as that's not a low-enough rate to "interest" (!) me, either.
-- BR
🥇 hunker down for the weekend. 😆
I've squirreled away over a quarter million to buy a house, and I think my only shot at buying outright is going to be the foreclosure auction.
Patience
@thedadyouneverhadchannel3544 should look better after the 24 election...
u must live at home with mom and dad to do such a task........good parents......just wait...
a+ i went to a foreclosure auction I was the only one there paid $50 bucks for a lot i did this twice sold each lot for $8000. Hang in there foreclosures is where the $ at good luck
There are still houses for about 100k in Syracuse NY. Joe is bringing back some of our jobs that went South under Republican leadership. Sucked paying all those taxes and watching everything crumble. There are not as many bailouts for snow like there is for rain. They are putting a humongo computer chip factory to help us become more independent again. That was Reagan's biggest screw up. Sending all our jobs away for the moron mission of busting labor unions.
My rental house 4br 1900sf in San Tan Valley, Arizona has gone down from 510 K at the peak and now I can probably get 375K at most for it. So tell Barbara she is dead wrong in the Phoenix Arizona metro area.
After being underwater in 2008 , she can go take a hike.
Yeah, not a good weather weekend in FL.
i can remember 2008 my house went from 340000 to 200000 so i believe most builders have a long way to go.
LOL that won’t happen.. Homes will melt up not down in this recession
The tax must be biting the builders in the behind not being able to sell these homes.
The price history of homes on Zillow is such a valuable tool. We can see the outrageous price increases of recent years. I have seen many say a price increase of 3 to 5% a year is normal for housing. I realize we have to take in account of upgrades and repairs, but some of those price increases Michael shows us are crazy.
Yes it really is. The price history tells us many things, such as when the property was last sold. It also gives us an indication of the overall desirability of the property. For example, I was searching for raw land and found some very small lots in extremely nice established gated communities. These lots were quite bad; rocky, badly shaped, and of course...massively overpriced. Nobody is interested in buying a tiny lot for $400K and then building a mansion on it.
Most importantly the price history shows us the ridiculous, unrealistic greed some sellers are resorting to. Property purchased in 2021 for $600K, on the market now for $1.2 mil. Real estate just doesn't work like that. The massive price run-up seems to have come to an end.
They are crazy and you know what Zillow and redfin are starting to hide the history of these homes more and more I’m noticing. It’s like they don’t want you to know what the house used to cost or what it was previously listed for…
The Zillow estimates of the houses are probably spot on. They are quite a bit lower.
Whatever you list your house for is whatever Zillow says it's worth. Their zestimate is trash but yeah the MLS data is valuable when not hidden
Not sure we can say the new home market is crashing because the median price is lower. It just means fewer homes were sold on the high end and/or more homes sold on the lower end.
Michael, while some prices are down I also believe people are getting less square footage and lesser amenities. I note locally; the over $1 million properties are up from last year while the under $750,000 homes seems down slighly but the quality is not the same as a few years ago.
Yes, some of the builders even say that they’re building smaller homes now to accommodate buyers budgets and wants. People also don’t want these big houses that cost a lot to maintain.
That sounds a lot like shrinkflation.
@@MichaelBordenaro The cost of construction has not come down since the pandemic... no cheap labor to import.
Thanks for info, I’m in Palm Beach County, Wellington to be exact. Recently significant increase in the “I want to buy your home” people…..thanks for the information! Enjoy the podcast!
Thanks for being here. Glad you enjoy it!
I’ve lived in the same apartment in Prescott, AZ for nine years- my rent has more than doubled in price. Down the street from where I live is a tear-down listed for $789,000!!! I remember that same house having a huge gaping hole in the roof for several years before it was “repaired” last year.
Anyone in a position to buy and wait -will most certainly do so.
When it's priced 50 percent more than it's worth 10 percent seems like a deal to those not paying attention.
I bought in a buyer s market in 2006. My home set on the market for 2 plus years. … went to auction.. I got it for 30 percent of its actual value.. today it’s worth 750k. Not bad for paying 73 k …. But look at how many years to get there…
Easy to hold in an appreciating market, not so easy to hold when you buy, and you see the value plummet shortly after, which is why many people walked away from their homes in 2006-2012.
LOVE YOUR CHANNEL. Keep up the interesting info.
Thanks Peter I’ll keep fire them out!
This video was packed with info. I had to keep rewinding. Thanks for what you do Michael
Thank you for showing up on Real Estate Mindset!
Another fabulous video. Solid and factual information to make wise decisions with. Your channel is the best on these subjects. Thank you for being the common sense place people can turn to as an alternative to the hype being thrown out there.
Another great video Michael…watching you for a long time…your coming into your own 😊
Thank you for keeping it honest.
Made me happy to see you and Travis collaborating on a video. Two smart minds. You all had some good upbringing. You are imparting knowledge to people and hopefully it is taken. BTW: One of my best RE purchases was in 2009 when the market crashed. It will come again.
Needs to crash harder! This might make 2008 look good
Great job and content Michael!
I just randomly ran into your video. I like your style with the walk about.
I love this weather! At least a break from heat and humidity❤
I don’t mind it just makes it difficult shooting the videos
Prices are not coming down. I wish people would stop considering 10% a reduction. Until prices are reduced by 50% and more in line with actual wages, it’s all still wayyyyy over priced.
Thanks Mitch
4:04. Big old Cadillac.
Cut the prices in half and then we we'll talk you down another quarter....😊
Thanks, Michael!
Great Public Educator a Real Positive Influencer.
You're a smart man Michael. Great Video as usual.
One of my coworkers bought right now cause her family was pressuring her to buy. Shes now stuck with a $3500/month monthly payment that she can only afford if she rents out one of the rooms. Some people just dont know how to wait
Stop telling folks business.. if you’re not willing to help STHU.
They are trying to sell 200K homes for almost 400K. People had enough and not paying those kinds of prices anymore. Get them prices under 300K
Northeast FL hasn't had any sustained sunshine for weeks. yuck!
And with the property taxes going up so much, if ANY politician pushes more stupid spending bills (with tax increases) I will actively canvas to have them voted OUT of office.
Outstanding video
Good job man
Prices are tanking only in certain markets.
This is true, and I even said that in the video
@@MichaelBordenaro yes sir you did. I commented before you said that. lol.
There is a huge entry level housing shortage but most people, millennials, first time buyers cannot afford to buy especially with insurance, taxes, maintenance, CA has mello roos tax and on and on....
From the videos I see you doing there Michael the streets are higher than the property. This might be a good reason why insurance rates are climbing there. Water from storms cannot drain away from the foundations of the homes because it is actually flowing back onto the foundations from the street. I do not see any curbs for creation of a high point with curbs to hold the water for siphoning away from the land. This is a problem when you have limestone earth formations underpinning the home foundations there. What awful city planning!
Yeah, they really didn’t think this through. Especially since a lot of of these neighborhoods are pretty old.
Michael I once had to stop a California home remodel worth $160K to spend $12K on drainage for my foundation during the rains of 2003 in Santa Clarita. The contractor who newly poured the foundation for the remodel demolished and discarded the 30 year old drainage system without replacing it and then poured new concrete on top of it. This experience (and the $100K arbitration I lost) taught me about directing storm water away from the home and the foundation.@@MichaelBordenaro
There are also some new homes in Ocala, good deals being offered by the builders
Texasans teaching Texasans about Texas real estate investing 🎉🎉🎉🎉 I like this statement!
We are waiting. !
Hey Michael How’s life treating you and Lisi ??
I’m very impressed how much information you bring to us. Like I said the other day; I believe you will get to 150,K subscribers within 6 months from now. Keep on keeping on my friend. Blessings,Carlos ✝️🙏❤️😊🇺🇸
Life is pretty good Carlos I can’t complain. Same for Lisi. I appreciate you always being here, my friend. Hopefully you’re right on that subscriber prediction!
This Miami weather has been very odd. I have been unable to do much as I still have no vehicle and cannot fix it due to the constant drizzle and wind. Hopefully tomorrow I can finally get the brakes working on my van.
New homes tend to be the most expensive in a particular area. Builders price in a little extra so they can come down on the price
Not true where old homes are in the prime central locations. Like, every land locked metro. Those old homes will sell much higher.
Used to be true, but not anymore. Location is the sole reason to buy an older home how, if it's not prime location you're insane to buy anything other than new construction.
50 % correction is needed and will happen in time. 1 1/2 year from now.
After the election
It's an election year😮
The market is changing fast. We plan an annual rv trip from California through Arizona and use a program called Harvest Host to stay at commercial breweries, wineries, and other establishments. We have encountered a number of places closing their doors on Jan 1, 2024.
I’m on the other side of the state from you, Michael. One of our weather guy says the whole state is going to get rain on Saturday. Hope it just offsets some of our rain deficit from this summer.
North Florida is consistently 4% lower on existing home listings. The only homes selling at asking are the well maintained, perfect condition ones that are still in high demand.
Almost none are selling above asking though, as we saw in '21-22.
I agree, what's wrong with waiting?
Indpls going up same house by same builder, different sides of town marked up $65,000 over.i understand sales and profits but enough is enough..
Once the cold hard reality hits of those property taxes that keep hitting month after month, those people will drop more often than not the asking price.
If homes more than double in price in less than 5 years and only comes down 30%, that's still way overpriced. Try -70% and that would actually start to match Real Wages which is the definition of affordable.
GottaLove❤PriceCuts
Look to high dividend paying stocks right now and watch Jan15th to the 19th.
Look to high divdend paying ETFs using covered call strategies
look fo covered call strategies
you may have slightly high volatility ( a little)
watch the midstream energy, pipelines, shippers of LNG and Oil products. Also AUS coal mines
watch shippers (Ocean going), not things like UPS or fedex
Charleston is seeing HUGE price cuts
Been following it for about a year or so and occasionally you will see homes go for asking but more often than not they are reduced by 50-100k!
I’m not jumping to buy with these rate cuts. Nothing above 5% really gonna move the needle for me!
January every seasonal employee from Amazon fedex ups usps and others will be out of work…. That’s thousands of people in FL that are going to unemployment.
Everything is fine.
I’ve saved a big down payment over the last year and half but now I’m worried about future income things are really slowing down as far as manufacturing goes i don’t know what to do
Patrick Boyle, the Irish economics professor, has just made a video about the US housing market. His content is always worth watching.
Nice view at 19:10
I am patiently waiting.
That's a bad strategy 95% of the time.
Hey Mike,
Great Video! Whats the name of the housing inventry map application you were showing in the videos?
I told friends and family years ago who were waiting to buy a house. I said, what are you waiting for? Interest rates were low and I'm better they'll be going up in the near future, and they did. They had good jobs and money saved. They're now kicking themselves in the you know what. I'm greatful our home is paid off and I can sit back and watch the show.
There will definitely be buyers who feel regret because they got in AFTER the price bottom. But COME ON, the odds that median home prices have already reached their bottom for this cycle as of December 2023? Well below 10%. If you think otherwise you need to look at more leading economic indicators.
I think that next year we will see the economy and stock market taking a major hit before bouncing back in the autumn on the prospect of interest rate cuts. It will all be about timing it right.
9:32 in my local: everything is stable with hardly any inventory nor any decline- be it rentals, houses, foreclosures. It’s a trainwreck of unaffordability.
You know if you are foreclosed on by the Bank, they still want the deficit of what you owe after the sale of the home. It is called a "deficiency" and in most cases you will owe that. So you don't have the house and you STILL owe them the difference.... Ouch!
When you said 11.5 mil I damn near fell down my stairs 😂😂
Far bigger than the percentage reduction in house prices will be the reduction in profits for the house-builders. Are any going bust yet?
89,000 dollars for annual property tax? A shocker.
I will keep my 2 bd 2 bath paid off house on a large corner lot. I've remodeled, updated etc. And paid off costs. Middle of usa small town. Safer than the cities.
My area.. southwestern Ft. Lauderdale.. Prices are higher than Ever...including rentals! Can't figure out what your talking about!
Barbara says buy; buyers say bye.
*let’s go 🔥*
70 here in INDIANA
Asheville not coming down. Everyone from FL moving here. :)
Michael, we don’t like new homes. Where we live, most new homes are two-stories poorly built with very small yard. No amount of discounts will get us to buy.
McMansions😅!
Mike, could you help us. Give us some information where we can find local market information, so that we can be more informed. Maybe you should do a video about that topic. Maybe paid services like snap force?
looking for perfect weather ??? Southern California has it most of the time, but the affordability is another story !
I miss home!!
Nice Cadillac
I don’t see home prices coming down much at all. The materials that go into home construction are going up, not down. Rebar, concrete, lumber, up, up, up, not sure why a builder would even bother building in a market that’s dropping. It’s the same with restaurants, their costs are rocketing upwards and then we wonder why a cheese burger costs $20. Lol, builders will go broke, sellers will simply walk away, there is ZERO incentive in selling a home u have no equity in. As groceries and all other commodities rise why or how is shelter supposed to get cheaper. So I will take out a mortgage to go grocery shopping but I will simply round up all my Pennie’s and nickels to buy a house. Think about it.
Just speaking from my situation even if new housing was cut by 40% where I live it wouldn’t matter. Prices are so extremely high that the price cuts are like loosing 20lbs when you weigh 450lbs. It’s nice but that doesn’t mean much.
Running out of rich people to buy these old ragged houses