What 99% of Real Estate Investors Won’t Tell You
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Yeah, we got a bit of a real estate disaster going on. Now, this is quite a hell of a lot different than obviously 2007 through 2009. Completely different situation. First and foremost, want to address homes right now. New home sales, not good. Prices for existing homes rose to $419,000.
Median existing home price. It’s the highest level on record. Highest level on record. You’ve got higher mortgage rates, making homes, quite frankly, completely out of reach for many, Americans. This, not good. Not good. I’ve argued this. I’ve written about this in the past. this obsession.
obsession that people have with the value of their home. Most of, you you go back in time, I’m gonna go back decades and decades, generations in fact, the price of a home pretty much went up with inflation. That was basically it, little by little, it would go up. And obviously government subsidies
Fannie and Freddie obviously drove the prices up. You can also talk about the problem we didn’t have enough inventory and people going out and having easy access to money and buying multiple homes. We saw what happened with that between 2007 and 2009, even obviously started well before that. And we talked about it and warned this, but none of this is good. None of this is good. People say, my God, look at what my house is worth. Look at what I can sell my house
Okay, okay, you can and congratulations, but guess what? You gotta live somewhere, right? You have to live somewhere, you’re gonna have to find another house. Okay, I’m gonna downsize. Okay, but again, the value of what you got per square foot obviously depends somewhat on where you live. It’s a wash. It’s a wash. Now granted, if you’re moving,
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out of state, you can find certain markets where you’re gonna find a bit of a difference. said, different real estate markets are different. But when you have a median home that’s over $400 ,000, you know, that’s since, it’s in February in 2020, this right before COVID, the median price of an existing home was $270 ,000. That’s a huge difference. Huge difference, not good.
for the economy, not good for young people looking to start families. It’s made things very, very difficult. And again, even people that can afford to have a home, they’ve got less disposable income. They’re not going out to dinner as much. They’re not able to do as much because again, they have to spend so much money on their home. Why we haven’t been able to figure this problem out, again, it’s just lack of leadership.
Lack of leadership, not just Washington, but also on the local level as well. And I want to tie this into commercial real estate. We told you this was going to happen. We’ve warned people about real estate investment trusts and what was going to happen. Again, we’ve been trying to help many people out that were sold many of these real estate investment trusts.
with the promise that what could possibly go wrong? Real estate will never go down. Hey, it’s commercial street, commercial real estate. It’s wonderful. It’s Blackstone Mortgage Trust slashed its dividend by 24 % as more bodies continue to be found. Yeah, bodies buried in the commercial real estate world. I was at last
actually Moody’s actually predicted that 24 % of office towers would be vacant by 2026. I think they’re wrong. I think it’s going to be much, much greater than that. Much, much higher than and it’s not just office towers, folks. It’s not just office towers. You’re going to have a ton of commercial real estate in the suburbs, even in cities as well. Doctors offices.
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Bye
Again, the trend right now because of what has happened with consolidation, because of Obamacare, you get these massive medical groups. You can see it everywhere. Doctors join in, they put up these big buildings, they all work in the same little office space there. And it’s happening all over the country. You’re seeing doctors, they don’t have single offices anymore.
They have to get me based upon the way things are structured. They got to do it as a massive team. It’s it’s much, much different. Then the way it used to be. And this is going to pile up as well again, unless you get obviously some some intelligent people in certain positions and understand the problem for what it is, and it’s going to be a bit of a hit. It’s part of the problem is that the amount of money and tax revenue.
Tax revenue, you’re about property tax revenue to municipalities and cities and whatnot, states, they’re gonna have to give a lot of that up. They’re gonna have to give a lot of that up and they’re gonna have to take it and bite the bullet and knock some of these things down. I don’t give a damn. I was talking about it my wife in the car the other day. know, all we’re driving through on Main Street in our town, again, real estate, homes through the roof. You put a house on the market here, it’s gone. It’s gone.
And you would think, wow, look at all of these little office buildings and whatnot. They’re all empty. There’s release signs everywhere. And I’m like, gotta knock these things down and turn it back to nature for crying out loud.
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Again, unless you’re gonna build a house on Main Street or whatever it may be, I don’t know. I don’t know, but to think that things are gonna change and it’s gonna come back, yeah, yeah. And blacksmiths next year are gonna be the rage too. Watchdog on wallstreet .com.
