The Fed / Interest Rates Home Depot | The Economic Ninja

Hey, everybody, economic ninja here. I hope you are doing great. Where am I today? I’m at a Home Depot. I’m at a home depot in Carson City, Nevada. Carson City is a really interesting spot and the reason why I’ve chose this location to do this video is so I can ride off the fuel. No, I’m just joking. There’s actually something really interesting happening here in the real estate market.

We’re going to talk about the fed keeping rates higher for longer and how they have a strong case. And now there’s some economists that are actually saying they may raise rates. Why? Because interest rates have to go up to be able to destroy your job. That’s really what it comes down to. I’m not joking. The Federal Reserve has actually come out and said it. Jerome Powell says he needs unemployment to be higher to be able to slow inflation, to slow all those people from running down to Home Depot and buying fixtures from Moen that are plated in gold or buying big screen tvs or anything, really stopping by Ikea and putting that on that new charge card because you get like 10% off or 5% off.

Boy, they really screw you the first month. Whoo. Anyway, sorry, I digress. But we’re going to talk about a handful of different things and we’ll talk about what’s going on in Carson City, okay. Because it is a very interesting real estate climate and we’re in front of Home Depot because Home Depot values the value of real estate. You see, as real estate prices keep going up, home Depots do great because people think, oh, it’s an eternal piggy bank.

I’m just going to keep putting money into my house and then flip it and sell it and everything’s great, but everything is not awesome. Now I’ve got that song in my head. Let me know down below where that came from. All right, first things first. Let’s talk about the Fed. Oh, and only five days left for the side hustle course at $199 and the price goes up. Super excited because we’re about to run a promo that once you’re in, you’re going to get a discount.

If you want to. We’re going to start doing live coaching calls because I want no one to have an excuse of why they’re not crushing it and making money. All right, here we go. Sorry. Let’s see here. All right. The Fed has a very strong case to keep rates higher for longer. This is a Business Insider. It says at the end of last year, stocks were soaring. The labor market remained robust.

Consumers were still spending, and the immaculate disinflation narrative appeared fully intact. Rate cuts from the Federal Reserve seemed imminent, with some on Wall street forecasting as many as six cuts beginning in March. What do you think? Type one if you think the Fed’s going to cut rates in March. Type two if you think they’re not going to. I love hearing what you guys have say it’s got to be interactive.

This is interactive, Ninja says. Yet Jerome Powell and his central bank colleagues have rebuffed those forecasts, and markets have pushed their rate cut predictions further into 2024. That’s because all this red hot inflation info keeps coming out. All these economists just keep being wrong. This week’s economic data tempered optimism once more. Again, I have to remind you, the Fed will not stop or severely slow inflation until they raise their rates just above the actual rate of inflation.

And since we know the government’s lying, type three if you agree with that, because I would be typing three until my thumbs fell off. Since they’re not doing that, they are not slowing inflation enough. Okay? They’re just having to lie to you, trying to figure out new ways that the government lies. It’s weird. This week’s economic data tempered optimism once more. On Tuesday, January’s inflation clocked in at 3.

1% year over year, above the expected 2. 9%, according to the Bureau of Labor Statistics. Compared with the prior month, CPI climbed 0. 3% more than the forecasted. . 02. So what is the lesson here? That all of the people that went to Coolidge and called themselves economists are wrong? I didn’t go to college. They don’t care. It says here non farm payrolls also surged in January and unemployment is hovering near historic lows.

U. S. Economic growth, too, continues to crush expectations, and Atlanta fed researchers don’t anticipate a slowdown in wouldn’t they? Why wouldn’t the GDP slow down? Oh, yeah, Biden keeps getting us to raise money through our taxes, crushing us so he could spend money on eternal wars. That’s it. Oh, yeah. Let’s build a couple more factories without employees that we can start making chips pretty soon that no one’s going to need before China moves into Taiwan.

That’s really the only reason. It’s really the only reason the GDP is going up. We’re in crazy town. All right. Actually, I’m in Carson City. All right. Meanwhile, the housing market has yet to soften. The price for a typical home in the US has climbed 47% since 2019. Actually, that’s not true. There are lots of markets that are hurting. As a matter of fact, I was looking in Austin the other day and I found a barn, Dominion.

I love barnuminiums. I’m not joking. I want to live in one so bad. I wish there were some in Nevada where I was relocating. There’s really nothing. You want a side hustle if you’re a contractor, start building barnuminiums near, from Reno down to Minden, Nevada. You’ll probably crush it. My point being is that brand new barnuminium on the water near Horseshoe Bay, $600,000. It’s absolutely gorgeous. It’s gorgeous where a couple of years ago or a year ago, that thing would have been selling for 750 all day long.

Boom, boom, boom. There are lots of climates around the country, real estate climates that are already turning down. There are still some that are coming up, but it’s because there’s such little activity. So let’s talk about the Home Depot and this area, Carson City. I talked to one of the gentlemen that run the DMV at Carson City, and what he does is he verifies your vehicle, right? He checks the vin, does a Vin verification.

When you’re coming from one state into this state. He says there’s lines every day of people in sheer panic coming out of California. This area right here is very low on inventory. Yet this is what’s really interesting, the new home builders. I just went to Reno and I was looking at talking with real estate professionals there, and they’re having to give all these amazing discounts in the new homes because they can’t move them fast enough.

The used homes are selling faster, but at the price point they’re at right now, they’re starting to stall. The $600 to $700,000 range, they’re moving quite fast, right? The 750 to 900 range, not so much price reductions like crazy. And that all comes down to what the costs, taxes, insurance, interest. Look at the ten year bond. We’ve seen it move up a little in the last few weeks, right? We are going to see even more pressure.

And now with this story that I’m showing you, the Federal Reserve is going to hold rates longer, higher for longer. And what you have to realize is they may, some economists are saying they may have to actually raise rates. Well, if they raise rates, everything’s going to go up, which means it’s going to crush local real estate markets, too. Your real estate market is going to hurt at certain price points.

But the media loves to tell you, and there are people that come onto my channel on the comments and go, you don’t know my market. I’m like, actually, I do. The higher end homes aren’t selling. The lower end homes are selling. There’s a few of them. There’s a handful of them. So that’s not a healthy market to me. That’s a crash. That’s how these crashes start. And then what happens is when you have enough people and you’re going to see inventory explode this spring, when you have enough people that all of a sudden dive in, they figure the same thing, and they all start cutting their prices, then it’s erased the bottom.

Let me give you another example. In this town, in Carson City, what I see is a big divergence of people. There were people mostly that bought their homes in 2013 to 2016. A lot of them did not buy their homes in 2021, 2022, right? So they all have a ton of equity stored up. And so as they’re selling their home, they’re more likely to have these price drops.

Look, and this is a weird culture shift for me. 90% of people in this region of the world or this nation, when they decide to sell their house, they just straight up move out. House is vacant, they go buy another house. It’s trippy to me because I’m not used to that in California, because out of state of California, I only bought fourplexes, triplexes, things like that. I didn’t buy single family homes.

So you look in this area, in California, we didn’t have enough money to, we’re going to go buy another house and let this thing sit vacant. By and large, most of us in California, like, we need that money to buy the next house. But here, they’re gone. All these homes are vacant. They’ve already bought another house. But what also is interesting is that also puts pressure on them, because after about 90 days, the market sitting.

If your house hasn’t sold in 90 days, 120 days, you start sweating bullets and you’re getting really close to being able to peel money off. The other day, looking at a deal, it was easy to peel 5% off, but I want to pull between ten and 12% off the current market and then still be able to rent it out and make a good profit. Now, am I buying rentals right now? No.

But do I need to live somewhere? Yes. So do I need to buy? Right? Yes. That’s the whole thing. That’s why me and Mrs. Ninja are always, like, button heads, because I’m going, we’re right there. Like the last home I bought. No, not the last home, but the home I bought right at the peak of the market. I remember telling my wife, I said, this thing is going to fall by 50%, but we’re going to buy this type of property because it had a big lot.

And I’m like, and I’ll be okay. And she goes, well, I don’t want to move anymore because I was dragging her from house to house. We were flipping homes. We were making money. That’s not really good. Just constantly moving your family, right? So I said, okay, how long do you want to live here? She’s like, I want to say. She said, eight years. Did you say eight years? Did you say eight years? You don’t remember? She doesn’t.

By year twelve, she’s like, I’m ready to leave. And I’m like, what are you talking about? I put so much time and effort into the house, like, I’ll stay here forever. But my point being is that I bought the property, right? It was a track house, but it had a big lot. And with that, I was able to sell a ton of tree palm trees. I was selling like $30,000 to $50,000 a year in palm trees.

I was making probably between 50 and 100,000 in tractor sales. But I couldn’t have done that if I didn’t have the lot right now, that home fell 41% to 46% at the peak, right? So I got pretty close to my 50%. I didn’t care. I had a fixed rate mortgage. Everything was awesome. It really was, because I was making money. So when I come here into Nevada, leaving California, I’ve got to buy, right? I can’t be stupid.

I got to be good with my money. I got to be frugal. So let me just throw this out. Know you guys want to make money. Think about assuming someone’s loan. If you got to go buy a house, negotiate. You also have to have patience, which, quite frankly, I do not have. The ninja has problems with patience. That’s just the truth. It’s hard to have patience. I have patience in certain aspects, in certain investments and in others I don’t.

And real estate is the most. It can bring out the best of you and the worst in you. I hope you guys understand what I’m saying. That’s why I love real estate, because you could take advantage of that, because you know what it’s like. So you’re on the other side if you’re the buyer and you go, oh, I know what that seller is going through, and I’m still going to go make some money.

It’s still business. It’s just business. So if I see any of you guys out there trying to sell a house today, well, it’s going to be awkward. Point being is this Home Depot needs real estate to keep going up. It’s not happening. And Home Depot is already telling you in their earnings report that things aren’t good. Now. I have a feeling their earnings are coming out soon. I have a feeling it’s actually going to be okay.

They’re going to be okay because they’re going to cite a lot of things. They’ve prepped and they’ve done a lot of things like put things in cages to keep them away from us animals. Because thefts are up, right? Loss is up. But the thing is that I think they’re going to be able to show this little rosy sign, but it’s not going to be there for long. The exact same little uptick happened in 2006 in their earnings, and then it’s going to go poopoo.

Anyway, I hope you guys got something out of this. If you want to start a side hustle like I did, I’ve had over 21 of them. A lot of people sit there and say, well, you just can’t stick to anything. I’m like, no, I actually bounce from one to one to one because the money keeps getting more and more of people don’t know. That course is $199. It’s going up in, I think, five days.

You can check the link down below, and it has a timer. All right. With that being said, the economic ninja is out. .

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