Why is the real estate market slowing down
5 Signs The Real Estate Market Is Slowing Down
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guys good to see back on the channel
let's talk about something that's very
very important which seems to be top of
mind for most real estate agents and
investors across the country which is is
the market correcting is it slowing down
now that is a good question but here's
another question I want to pose to you
does it matter
right because yes it is in some markets
no it isn't in other markets and really
doesn't matter because those who
understand market cycles and those who
understand how to capitalize on market
cycles can make just as much money if
not more money when the markets falling
apart
then when it's booming so I just got
back from the Northeast on two-week trip
it's kind of why the videos haven't been
coming out as much I flew up there to
meet with all our team leaders I flew
into DC Metro I talked I went to
Manhattan New Jersey Virginia
Connecticut Pennsylvania North Carolina
so I was all up there guys and I met all
these different team leaders and I met
all the different industry leaders up
there and talked to a lot of mega
brokers and agents we're building our
teams all across the country guys as you
know if you want to partner with us and
you're a broker or agent reach out to me
I'll explain to you why so many people
are doing so right now but right here on
the board behind you guys we're gonna
talk about a few things that will show
you or our frontline indicators that
your market could be slowing down and
then I'm going to film a video after
this video that we'll put out later this
week that's gonna kind of tell you what
I would do to prepare for this crash or
correction or whatever you want to call
it slow down the market so that you can
position yourself to do very very well
and position yourself to be profitable
so let's kind of look at this guys so
the first thing we need to look at right
here is number one building permits and
new builds so right now if your market
and you start doing research on your
market if they're number of building
permits is going down and the number of
new builds is going down that's a good
sign that your market may be slowing
down so in the last crash who got hurt
the most so let's think about this if
you owned houses that are fully livable
and you get caught at the top of the
market you can rent them out now a lot
of investors are going to be able to
escape this crash because of Airbnb and
I may throw a video talking about this
because it may cause a massive flood of
Airbnb houses in the marketplace because
flipping houses they're too high price
point can't finance out and be positive
cash flow they're gonna have to do
something rather than foreclosure and
we'll talk about that maybe another
video but what's happening is if you get
stuck with a house that's livable
someone can move in and rent it if you
get stuck with a house that's half built
and all the sudden the market crashes
and to finish these houses out and sell
them you're still selling on the loss
Builders are going to start walking away
so a lot of these builders understand
these cycles and when they start feeling
the heat and the pressure they're gonna
stop building so many houses at top of
market and they're basically in the back
off and building permits are gonna drop
so think about that if your building
permits are pulled up are starting to
drop the number of permits being pulled
in your area this is a good sign that
your market is slowing down now you have
to understand that we have a macro
market micro market and tiny little
micro markets with each within each
micro market so just because some
markets are slowing down doesn't mean
your market may be right number two
number of actives so if you're pulling
up your MLS and most MLS is the color
green stands for number of actors not
all of them but most of them so if all
of a sudden you used to see two to three
actors in these subdivisions that you're
buying in and now it's four to five six
to seven seven to eight what happens is
this is basically what's happening
there's too much inventory in the
marketplace when the markets booming hi
there's a lot of buyers in the
marketplace scooping up that inventory
now there's not enough buyers to buy up
all this inventory and what happens is
these houses sit which means more houses
are coming on behind it because those
original houses are sitting there giving
time for other houses come on the
markets it and if you're seeing a lot of
actives in a certain market guys make
sure your numbers work make sure you're
buying houses that have really good curb
appeal really good layouts because
cutting corners are just throwing a
house on the market that we used to get
away with is no longer going to happen
in most markets especially in that 350k
and up up price point if that makes
sense
days on market same thing with number
baptists guys if days on market and are
increasing these kind of go hand in hand
because the longer update the longer the
days on market that means more houses
are sitting giving more houses a chance
to come on market and sit next to those
other houses so they kind of go hand in
hand but if you're seeing your market go
from where you used to sell houses in
less than 14 days to now it's taking 30
to 45 days this is another good
indicator that your market could be
slowing down
now in the next video guys we'll talk
about how to prepare for this because
it's it's good to get ahead of this and
understand what's going on because a lot
of investors are selling off their
portfolios at the top that's another
sign that we're not talking about in
here a lot of serious experienced
investors if your mentor or people that
you know have been in the business for a
long time or selling off their houses
pulling up cash and hoarding cash and
capitalizing at the top of the market
maybe you should take recognize this and
learn by example of what these
individuals who went to last crash are
doing right they're protecting
themselves from losing all the equity
like they did before in the last crash
price reductions so in my market for
about the past four years I never
reduced a house one time and in Dallas
Texas
I just reduced a house twice for the
very first time literally my career
actually because I came in the business
after the last crash and so this is the
first time I've actually had to double
reduce a price that's a little
concerning right now you shouldn't get
too concerned because if you understand
how to buy houses at the bottom you're
gonna make a lot of money but yes if
you're having to reduce prices or houses
are sitting in your market in they're
reducing prices
it's another signal that your market may
be slowing down so just start asking
around town because that's the last one
I want to talk about community talk
what's the buzz on the street if you're
in a market place where you've never
heard anything except the markets
scorching hot and now a sudden you go to
an REI club and people next to your
saying yeah my house is there sitting or
you talk to someone else and real estate
agent they're like man the markets
slowing down or I'm having to put more
repairs in these houses and I used to
that's a good signal once the buzz
starts happen around town that you're at
that front edge of the market slowly
hitting the top and starting to correct
now I wouldn't be too concerned about
this guys because most of the people
that get killed in real estate crash our
owner-occupant retail buyers people who
live in houses that bought a house at
100% of market value or more and then
the house drop 20% 30% or more in value
and now they lose their job and they
can't make that payment investors who
understand how to do this right by
saving up money in hoarding cash and
working with private lenders are
preparing to buy houses at the bottom
once all the big lenders shut down and
credit lines are called back in they're
gonna make a lot of money so think about
that our building permits being reduced
to new bills cutting back in your
marketplace number of actives are they
increasing days on market are they
increasing our people
prices and are you hearing other
investors and agents in your marketplace
talking about this market could be
slowing down guys if you liked today's
video hit the subscribe button on the
next video what I want to talk about is
a couple ideas to protect yourself
against this coming market correction
and yeah we're gonna dig in I'm gonna
give you my best opinion I hope you like
today's video guys we'll see you next
one have a good day
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