The brown cow eats in the forest, eats the grass in the. Hey, everybody, economic ninja here. I hope you are doing great. We’re gonna talk about the craziness in the housing market. You know, the housing crisis. Everything is awesome. No, it’s not. We need homes. We need homes. Remember, there’s less homes available these days. That’s what all of the real estate bros are gonna tell you, that real estate just going to keep going up because there’s a diminished housing supply.

Now, I will say there are less homes available, single family homes in the country to buy because big companies like Blackrock are making sure that’s impossible because they’re using your pension funds to actually buy those houses up and rent them back to you. But here’s the thing. I want people to understand this. Blackrock, Blackstone, and all those corporations use your money as down payments. They’re actually highly leveraged.

That’s why Blackstone just gave up its Manhattan tower, one of its headquarters, at a 50% loss. It just gave it back to the bank. So we know the law. And so the truth is, all of these companies are highly leveraged, and there is an economic crisis that is already here. It’s no joke. That’s why President Jeff Borgan’s out there printing a bunch of fake money and printing it, sprinkling it over all of the college students, saying, some of you may get some loan help.

We are in a crisis, and the real estate crisis is getting worse. And what is going to happen is that one thing that we’re going to talk about today is rents falling across the nation. We’ve already talked about the median price home falling. So I don’t care if you’re a professional real estate agent and you’re telling me the housing market’s not going down. You just don’t know what you’re talking about.

But it’s okay. I’m a weirdo. I’m just dude with a Brohawk in a dream. I barely made it through high school, so what the heck do I know, right? I’m not a fancy economist with a degree from Wharton, and I’m going to be honest with you. This is decaf. All right? So today we’re going to talk about a story at a zero hedge. It’s about rents falling. This is crazy.

Why would that happen? Well, it’s because tons and tons of inventory is hitting the market every single day. As a matter of fact, from 2010, if I had a fancy editor, but he’s too busy cooking eggs right now to put up a chart it would show you that since 2010, multifamily apartment complexes around the country have exploded. And there are more and more and more and more. Got to have those people coming over from Mexico.

All right, sorry, did I say out loud? All right, here we go. You. And don’t worry, it’s not the Mexicans that we have to worry about. I’m just saying. Just saying. Love all my hispanic friends. This is crazy. We are in crazy town. So what are you going to do? You’re going to sit around on your butt and take it? You’re going to watch CNN and get angry or Don Lemon and laugh like a joke? Or are you going to do something about it? And the truth is, if you aren’t preparing for this, well, then you’re just going to be part of it.

I plan to prepare for it. It’s going to be a little awkward if I’m the only one buying up real estate. Pennies on the dollars. This thing comes crashing down. Check this out. Us median rents slide for eight months on surge in new apartment supply. I had a friend of mine go to Florida, called me up and he says, oh, my gosh, I haven’t been to this part of Florida in probably ten years, since I was growing up there.

I get there and the entire place is blown up. There are massive apartment complexes everywhere. And I said, you know the key? He said, it’s just like you said. I’m like, you know, the key to a real estate crisis is when you see move in specials, start looking for signs for move in specials. And so I sent him on that. There are signs all over the place and that is a great sign that these apartment complexes can’t get you to come in and move in.

So things are bad, right? So it says. High frequency data from realtor. com shows the US median rents slid in December on a year over year basis for the 8th consecutive month, down 0. 4% for zero to two bedrooms across. Who’s zero to two bedrooms? I mean. Oh, I know. It’s a studio. I was a real estate agent once. I was a horrible real estate agent. But zero to two bedrooms across the 50 top metro areas.

The median asking rent was one, $713, which was down by this. I know this is breaking news. It was down by $4, but you got to start somewhere. So I used to tell all my girlfriends, point being is this. It was down $4 from last month and $63, which is down 3. 5% off of the July 22 peak. So see, start somewhere, you get somewhere. However, rents are still $309 higher than the same time in 2019.

Now I want you to understand something. Everywhere I go in large metropolitan areas, there is building like crazy. Matter of fact, I cruised into Reno, Nevada the other day. That place is blowing up in new apartment buildings. Insane. I saw new apartments all over Reno being built right now. All over. Where was I? Sparks, Nevada. It’s getting more and more. There is an actual housing crisis on the flip side, and that is going to be for the landlords.

As a matter of fact, as more of these apartments jump online, you have to remember that it becomes cheaper and cheaper as rents go down to rent a place than to buy a place. Okay, that takes that buying pool of homes, of would be home buyers, shrivels them down to nothing. I know it’s cold outside and they in turn turn the housing market south. Now I know this is crazy because the median home price is dropping.

You can actually go look. If you google median home price fed, you’ll find a website called the St. Louis Fred. I always think of Fred Sanford when I think about that chart. It’s great thing. And you’ll see that the price, median price of homes were doing this and now they’re doing this. There was a little bit of a don’t let the analysts fool you, don’t let the real estate agents fool you.

That doesn’t mean it’s going to take off again because it’s too expensive. So you have two things coupling. There’s a certain point where all of these homes hit the market, right? There’s a ton of single family building all around the country as well. And as those hit the market, more and more hit the market. What happens? And remember, Covid took this big chunk out of construction for a while, right? Sort of knocked construction offline for a handful of months and then it resurged, right? The supply chain bottleneck sort of stopped everything.

And then there’s a surge. So at the same time we’re going to have a massive amount of, and it’s already starting of new housing units come online. When that happens, think about what happens on the other, the flip side with buying homes, it becomes so inexpensive comparative to buying a home to rent. So all of the focus moves over to renting. I’m renting right now. I’m waiting for a correction now.

Am I still looking for homes? Absolutely. Why? The other day I told you that I saw a home, they were asking 750,000. I believe they settled the other day at 600,000. That’s a massive correction on a percentage basis, but it’s going to keep getting better. All right, so every day I’m still looking to knock off 10%. There’s a property the other day I was looking at, I was thinking about offering a 10% offer lower and I believe they were going to take it.

But I think there’s still a little bit more downside I could pick up on a percentage basis based off of the fear of the seller. All right, now, people still need rentals. There are deals to get right now, but by and large it would be better to wait than to buy. I did a video the other day on, I want to say it was the economic ninja channel with a gentleman named Jesse, one of my students from the how to prepare for the real estate crash.

He went out and he pulled out some of his 401k because his four hundred and one k was set up pretty safely, making 5% to 6% a year. He pulled it out even after paying the fines with the IRS, he’s pulling out 17%. He’s making 17% cash on cash. And those are with safe rents, rents that aren’t gouging the renter. That’s a very smart move in my opinion, but that’s just my opinion.

I’m not a financial advisor. I just like making more money than I could make in the bank. So there’s diversification that is happening. There are deals to be made right now, but what are you guys willing to do? What kind of risks are you willing to take? I would rather wait on the side of having most of my money, the larger pool of my money attacking the market while there’s fear in the market, right? Because that’s when you get the better deals.

So now let’s dive back into these numbers, it says in 2022, the rental market experienced a significant shift in momentum, Realtor said, explaining that the influx of record high new multifamily homes exerted downward price pressure on median asking rents and added this trend will continue producing weakness in the rental market for 2024 as the completion of much needed supply is expected to further impact the dynamics, it says.

The report pointed out that the metro areas across the west, such as San Francisco, Los Angeles, saw continued declines in rent prices on a year on year basis. However, some of the most significant declines were in the southern tier of the US as multifamily completion rates soared 32% from January to October. In a separate report, rental property software provider Real Page said us apartment supply topped a 36 year last topped 36 year last year with 444,000 apartment units completed let me read that again for all of the real estate bros.

And everybody that talks about a housing crisis. A housing crisis. Oh, hey, just real quick, just throwing this out there. Do you know that a lot of apartment buildings around the country, at one point, there’s another cycle where they get converted to ownership, where they actually have certain rules changed, the county or city, and they can actually, during supposed housing crisis, apartment complexes can be converted to ownership.

You could actually change it to where people in the apartment buildings could actually buy that apartment, set up like a condominium. It’s a really cool thing, and this happens during those times. I believe you’re going to see some of those start popping out. Hopefully, the developers right now that are building all of a sudden start seeing dollar signs. Because if you have an apartment complex right now, think about this.

This is your multimillion dollar idea. Stand by. You own a multifamily property. Your city or county is going through a housing crisis. At least they think that. All of the woke people think there’s a crisis. All right, go down and say, you know what? Why don’t we separate this sort of put some condominium rules on this and have this rezoned to where I could sell these units to homeowners to actually, people could actually buy this apartment.

Sure. There’s not a garage, but I could split up each unit. We could set up an HoA and we could sell it so people could have home ownership in a time where they desperately need it because there’s a housing crisis. I mean, look what crazy Gavin Newsom’s doing. And I’m not joking. That dude is nutball. He is allowing second units to be built all over the state. And it’s to the point where you can build a granny unit or a secondary unit, and you can actually split it off from your personal residence as a second home.

So me, let’s say I have a track house, right? I got a tiny little track house. I could put a second unit in the backyard, split it off, and sell it as real property. That is insane. So hopefully, people start thinking like, oh, man, this is the time you take advantage of the bad news or the misinformation and go out there and absolutely crush it. All right, so it says right here that us apartment supply topped a 36 year top at 440,000 apartment units completed.

That tells you right there, large corporations like Blackstone and pension funds that are out there investing your money in real estate reits, they’re hurting right now, especially because the commercial mortgage backed securities crisis. But they’re going to have to lower rents. And they built those properties at a certain valuation. Those valuations aren’t going to hold as their competition lowers their rent down the street. They’re going to have to lower their rents.

Margins are going to get squeezed again. Remember, all of these apartment complexes are built on something called a cmbs, commercial mortgage backed security that needs to be refinanced every five years. And for some crazy reason, the american public thinks the Federal Reserve just wants to lower your rates. Now, I don’t think you understand how that works. See, every seven to ten years, the Federal Reserve has low rates.

Accommodative rates gets everybody sucked into debt, and then all of a sudden they do, you know what? We should raise rates because prices are getting a little too overheated. That’s what happens when you have cheap credit. So let’s just raise rates. Nothing’s going to happen. Don’t worry. And they turn on the burner and it just fires up and it gets hot and hotter and hotter until it gets too hot and everybody bails.

Well, guess what? Everyone’s bailing. Do you really think the Federal Reserve wants to help you? Nah, they’re going to lower rates, but they’re going to lower rates. When our GDP goes negative by a considerable amount for the first time, they’ll lower them saying they’re your savior. And then before you know it, it’s too late. Banks won’t lend and you’re out. So what are you going to do? You’re going to save money? You’re going to get ready for this? Are you going to sit on the sideline like a baby and sit back and go, I just need a bottle.

I just want to suck on my thumb because I need a safe space? Miracle isn’t built on safe spaces. Good times make weak men. Weak men make hard times. Hard times make strong men. Choose today what you’re going to be. Strong or weak. Ninja out. .

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