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Hello everyone! Maybe I'm completely out of my mind, but I'll just say it straight. Maybe now is truly a good time to buy a house again. Yes, it sounds like a joke, given mortgage rates at 7.5% and record housing unaffordability, but on the other hand, for the first time in over a decade, there are far more sellers than buyers-the biggest gap since 2013. The number of pending home sales transactions has fallen by 40%. Literally no one wants to buy a house right now, and oddly enough, that's where the best opportunities can lie if you know where to look. That's why we need to discuss what exactly is happening, how some shoppers are getting discounts of 20 to 40%, and why this could be one of the best opportunities in a decade. Because by the time
everyone else realizes it, it will be too late. Before we begin, though, please do me a small favor. If you think I'm crazy, let me know by clicking the like button and subscribing if you haven't already, because I sincerely appreciate you listening to me. And as a token of gratitude for that-here's a photo of a tomato. Thank you very much, and also a huge thank you to Upside for sponsoring this video, but more on that later. So, before we talk about home prices, the buyer's market, and where to find the best deals, we need to discuss the affordability trap. Listen, what's the matter? I'll be the first to admit it: there's a reason why almost no one wants to buy a house right now, because the math is really bad. For example, the median
home price in the United States in September was $417,000, marking the 39th consecutive month where prices were higher than a year ago. In addition to this, mortgage rates have also changed in an undesirable direction. Recently, the cost of a 30- year mortgage reached 7.5%, which is 1% higher than it was at the beginning of the year. To put this into perspective: for a $400,000 home with a 20% down payment, that means an extra monthly payment of almost $300 for nothing. Additionally, Redfin found that the typical monthly mortgage payment increased by 8.8% compared to last year, the highest rate in Redfin's history. In fact, in terms of monthly costs, housing has never been as expensive as it is now. And for a buyer today to
have the same monthly payment as at the beginning of the year, prices would have to drop by 11%, just to break even. However, this is where the fun begins, because while the numbers look terrible on a national scale, if you dig deeper you will notice that not everything is as it seems, and this brings me to the split in the housing market. So, what's the point? People talk about the housing market as a single thing, but in reality it is made up of hundreds of individual cities moving in different directions at the same time. And the most interesting thing is that if you look closer, you can see record drops. For example, housing prices in Austin are now essentially at the same level as they were 5 years ago. And this is after prices doubled
during the pandemic. The same can be said about Oakland, California, as well as Washington. In these markets, housing is cheaper today than it was 5 years ago. Additionally, many places where prices have already fallen continue to get cheaper. For example, Redfin found that the largest annual price declines are currently occurring in Seattle-by 6.5%, San Jose-by almost 5%, and Orlando-by more than 3%. However, at the same time, other regions have grown so much that it's almost hard to believe. For example, over the same period, home prices in Miami have increased by 57% since 2020. Camden, New Jersey, grew by 53%, and Hartford and Rochester both grew
by 51%. In fact, Hartford is now 29% more expensive than at its peak in 2022, while Austin, Texas, has fallen by almost 29%. So why is the market so divided? Well, there are three specific forces pulling these markets in opposite directions. Let's start with the first: in some areas, a lot of houses have been built You see, the markets that are falling the most, like Austin, Florida, and many cities in Texas, were simply flooded with new construction. And the owners of such houses are ready to be the first to lower the price, just to continue sales. And, as you guessed, this pulls down the prices of all other housing. In addition to this, the situation is worsened by a second factor. Prices were rising faster than local incomes.
You see, during the pandemic, many people moved to these cities with high salaries and drove up housing prices to levels that local residents could not afford. But when rates eventually rose again, they had to rely on local revenues again, which meant that house prices had to fall to a level affordable to most buyers. And on top of that, what's even worse, we have point number three: housing maintenance costs have increased. Just look at Florida. Homeowners insurance has tripled since 2019. This means that when your insurance goes up from $3,000 to $9,000 a year, that money doesn't just appear out of thin air. Instead, they are subtracted from the amount the buyer is willing to pay for the house.
Meanwhile, the Northeast and Midwest are experiencing the exact opposite problem. In fact, there are fewer homes for sale there now than there were in 2019. Very little new housing is being built there, and house prices were already quite affordable, so they continue to be actively snapped up. However, this is where the situation gets really interesting. While most people are trying to wait for mortgage rates to drop, other buyers are making deals that would have In fact, they're getting such great deals that I'm starting to think, " Come to think of it, maybe I should buy one too." So, where the best options are hiding, how much you can bargain
now, and how to tell if you're getting the deal of a lifetime or buying a home that's going to fall in price-here's what you need to know. But before we get to that, even though now is a great time to buy a home, that doesn't negate the fact that housing affordability remains a huge issue. That's why I think it's so important to save money where possible and use every dollar wisely. Additionally, one of the easiest ways to save money is to simply get cashback on purchases you already spend money on. We're talking about fuel, groceries, and restaurants, and that's where our sponsor, the Upside app, comes to the rescue. For those who don't know, Upside is a completely free app that allows you to get extra cashback on purchases you would have made
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below. Thank you very much, and now let's get back to the video. So, on where home prices are headed, why certain markets look so bad, and why this could be such a great opportunity. We need to talk about panic selling. Listen, when it comes to investing, there's an old saying that you should buy when there's "blood in the streets," or to put it simply, the best deals come when everyone is too afraid to act. And, dare I say it, I may get a little criticism for voicing my opinion, but I believe we are approaching this point in the housing market. For example, Redfin found that there are 63% more home sellers than buyers, the largest gap in their records since 2013. Or, speaking in real numbers, that's
about 1.5 million sellers competing for 900,000 buyers. And 41 of the 50 largest metropolitan areas are now officially buyers' markets. Again, by the widest margin since Redfin began reporting this in 2013. Also, here's what's interesting. The Miami market, which I mentioned grew 58% since 2020, is now one of the largest buyers' markets in the entire country with 160% more sellers than buyers. Think about it. For every buyer in Miami, there are two and a half salespeople trying to get their attention. That's why 22% of homes listed for sale have just had their price reduced, a record for Redfin. The typical home now takes 49 days to sell, and the number of pending transactions-a fancy way of saying "homes under contract"-is down 12.7% from last
year, again the lowest level in Redfin's history. All of this means that many homes are now selling for significantly less than at the peak of the market. For example, Austin-I'm going back to Austin again, but this is a great example. One brokerage analyzed every recently sold home and found that 75% of people who bought a home in 2022 are now listing it for less than they paid. By the way, even in Beverly Hills: Lizzo bought her house in 2022 for $15 million, and sold it this year for $11 million. That's almost $4 million in losses, not including the costs of closing the deal. Additionally, we are approaching one of the slowest times of the year for real estate sales. In fact, here's an interesting fact: buyers who close deals in December pay
the lowest markup compared to other months, mostly because people selling during this time really need to sell urgently. So, if you put all of this together, we get an almost complete lack of competition, rising supply, very low demand, high mortgage rates forcing many buyers out of the market, and sellers entering a season when activity is typically very low. This is the perfect environment for your low price offers to be accepted. Think about it this way. If you offer 10% less than the $400,000 price, that's a savings of $40,000. That's $8,000 less than you need to put down as a down payment, plus savings on mortgage payments of about $300 per month over the life of the loan. And that's
not even considering the fact that you could offer 20% less. Also, here's what really impresses me. The way people think about buying a home today is very similar to my own experience in 2011. I was buying real estate back then, and everyone told me it was a bad time, that I should wait for conditions to improve. But it turned out to be one of the best buying opportunities in modern history. So, in terms of whether history could repeat itself, we should talk about buying during a crash . Look, if there's one thing I'm really good at, it's taking on a task when no one else is interested. I got my real estate license in 2008 and started working just as the market peaked and started to fall. Everyone told me, "Now is a terrible time to
start because the real estate market is dead." Nobody is buying anything. Prices are falling rapidly. "Better do something else." But, of course, I didn't care. As a beginner agent, it turned out that I started with 80% less competition because many people left the business. And I had a lot of space to work. And then again, in 2011, I had saved up a bunch of money and wanted to buy real estate because prices had dropped 50-60 percent. And again, at the same time, everyone was telling me, "Now is a terrible time to buy a house because prices are still falling. Even more offers will come to the market Banks no longer provide loans for the purchase of housing with a 0% down payment.
Resale real estate is dead. The only way to make any money is to hold the property for a very long time, because prices won't recover anytime soon." In fact, to give you an idea of how unpopular real estate was: in 2011, a survey of economists found that almost half of them expected prices to fall further, and none expected them to fully recover in the next five years. Even more insane is that when Gallup asked Americans what they considered the best investment that year, real estate came in a distant second to gold. That is, in essence, at the moment when the housing market reached its bottom, no one needed it. No one was interested in this, because instead of not paying a down payment and getting a loan for a house that was
increasing in price by 20% per year, now you had to pay 20%. You had to have a good credit history. It was necessary to have a sufficient level of income to service the loan. And that's why people thought I was crazy because I was buying when prices had just dropped significantly. Well, what do you think? To me, those numbers made sense. So I started making dozens of low offers. And I continued to do this on a regular basis. Sometimes every day, sometimes every week, every weekend I would inspect properties and simply write low offers. And within about a year, three of them were accepted and closed, and subsequently these objects quadrupled in price. But
remember, back then everyone just wanted to wait because they thought prices would continue to fall. They wanted to see what would happen to the market. And by the time they realized it was a good opportunity, prices had already risen so much that the opportunity was lost. Today, on the contrary, I notice similar trends, where everyone unanimously decided that now is simply a bad time to buy a house. Everyone is waiting on the sidelines for interest rates to drop again. But I see some people getting opportunities and deals that would have been unthinkable just 2 years ago. And these are the same people who are now making very low offers, trying to close
deals that have simply been unavailable for years due to intense competition. Or, as Redfin put it, it's a buyer's market born of caution, not strength. Note, to be clear, this is not 2011 when prices fell 60%. We are living in a time when prices are at their highest in a long time, and interest rates are also at their highest in a long time. But I'm noticing a very similar mentality, and some people are getting deals that I have to say are pretty incredible. So, in terms of what I think I'm doing and what it means to you, here's what you came for. First of all, I want to make it clear that the real estate market is very local. Every market is different. And I'm not saying that now is the best time to buy in history. In fact, I have a feeling that prices
will continue to soften. I have a hunch that interest rates will remain higher than many expect. And that means we probably won't see anywhere near the price increases that people have become accustomed to over the past few years. But I'm starting to see this as a turning point, where it's time for the buyer to start accepting low offers. At best, you will be able to buy the property at a discount enough to offset the higher mortgage rates. And if rates eventually drop, you'll be able to refinance with lower payments. In the worst case scenario, prices will continue to fall, but you have already factored that into your initial offer. So you should have a small margin of safety. And you live in the house you wanted to buy anyway.
Personally, I don't think this is the best risk-reward ratio in the housing market that I've ever seen, because it's not. Sellers are asking such prices that, to be honest, they don't make any sense to me at all. But if you're a buyer with a 20% down payment, you have approval, you're ready to make a deal-you're a rarity in this market. This means that you can be quite aggressive in your offer, and if they agree, you can really get a good deal because the competition is very low right now.
I think this is one of the best times in years to just start making suggestions. If they don't agree, it's okay. You are not losing anything. But if they agree, and you get a discount enough to offset any further price drops, if any, then I think: why not? Why not? Sellers can even take on the costs of closing, repairs, or even an interest rate reduction, which Redfin says sellers are starting to pay for. Again, I'm not saying you should buy any house that comes your way. Objectively, if you look at the numbers, renting is still the cheaper option. But, as I said, there is almost no risk in offering an amount that would be unreasonable to refuse. And if they agree, congratulations. No, I don't think it will make you rich overnight or that housing is somehow
superior to any other investment. But if you want to buy anyway, now is not the worst time in the world if you find a good enough deal. And please like subscribe if you haven't already So, having said that, thank you very much for watching. And if you want early access to my next video, as well as bonus videos that I don't publish for everyone, join the channel sponsors. You'll get access to a lot more content that's usually a little too specific for YouTube's algorithms. Plus, you also get priority replies to all comments because they appear as notifications on my phone. So if you're interested, feel free to join. Thank you very much, see you next time.
Here's my cat right here.
