Stopped Paying Mortgage | The 2020 Real Estate Collapse

Lets discuss the upcoming real estate collapse, the setbacks of mortgage forbearance, and how this impacts values – enjoy! Add me on Instagram: GPStephan

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We can start by looking at Redfin, who’s one of the leading real estate brokerages who analyzes home buying and selling data. They found that – in April – we saw a 50% DECLINE of inventory on the market compared to the previous year…meaning, 50% of sellers are holding off from listing their home and choosing NOT to sell.

HOWEVER…NOW, in May…we’re finding only a 24% drop in listings from the prior year, which indicates that sellers are SLOWLY beginning to re-enter the market and list their homes for sale, although there’s still far less inventory on the market than usual.

NEXT – as far as LISTING PRICES are concerned – meaning, the price a seller LISTS a property at…Redfin found that listing prices are UP 5.4% from the previous year, following a 1.7% drop in April that brought the average listing price down to $302,000.

BUT EVEN MORE SURPRISING was the surge in HOME BUYING DEMAND, which has just surpassed PRE CRISIS levels. Now, for anyone unaware…Redfin classifies home buying demand as anyone who reaches out to tour a property, make an offer, or inquire about buying a home…and this shows that there are still people out there, wanting to buy, and waiting for the right opportunity to do so.

And…the shock of home buying doesn’t end there…they found that homes are selling at the EXACT SAME SPEED as they were back in 2019…meaning, as of May 8th…45% of listings are under contract within 2 weeks, with mortgage applications up 11% from a week earlier.

BUT…with all of that, I’m sure what we ALL want to know about is PRICE…are real estate PRICES going UP, or DOWN? And data from the National Association of Realtors found that home PRICES actually INCREASED in 96% of all Metros during the first quarter.

CoreLogic, one of the largest data analytics companies, found that – even though prices have risen 4.5% year over year…they expect that, over the next year, we’ll only see an increase of half a percent from where we are now.

Zillow also published their own predictions, which estimated that real estate values would drop 2.7% by October of this year.

HOWEVER…I also want to be a total realist and say this: The reason home prices have yet to be affected, is because real estate prices typically lag behind everything else. In addition to that, interest rates are INCREDIBLY low…so much so, that it’s essentially FREE MONEY for anyone who gets an interest rate below 3.5%.

The OTHER reality, is that anyone who doesn’t NEED to sell a home, isn’t selling a home. There are plenty of people who were planning to move, but just decide, instead, to hold off…that means less inventory on the market, and with less inventory – combined with low interest rates – housing prices should remain relatively stable.

So, even though as of RIGHT NOW – housing has barely been impacted – there are a lot of “What ifs” that could mean the difference of prices continuing to hold steady, OR the market going down.

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What do you think?


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  1. I can answer this question with no real estate background only using common sense. Home values will not go down, at least not significantly because the people selling them want the most out of the sale as possible so they will not accept offers lower than the listed value, no matter how ridiculously overpriced they've listed it. I know this because I am looking for my first condo and I am seeing deluded sellers listing as small as 400 sqft properties for over $300k when some 500 Sqft properties are listed for $290k within the same area. People want money and are unlikely to do anything that would lead to them getting less, the same reason business owners wanted to reopen early, why people want to be able to send their kids back to school so they can go back to work, people want to make as much money as possible.

  2. Hey Graham, do you think REITs like MITT and IVR have a chance of bouncing back to their pre-covid levels after this mess? or do you think they are permanently damaged or even file for bankruptcy?

  3. How much would you pay right now for a rental property that has a renter not paying, no recourse to get them to pay for the next year, and when you do have recourse, there will be a log jam in the legal system and a huge politically active squatter community? My bid starts at 20 cents on the pre-pandemic dollar.
    Why would anyone take a new renter that has no payment obligation, that destroys the sale value of their property?
    If there are no rentals without half-year+ prepayment clauses, and no rented properties for sale, the supply goes down by what 20%? 30%? And the demand does what? With no reasonable rentals I say it goes up, limited only by means which is up due to record low rates. Cities stagnate until lifestyle comes back. Suburbs with desirable lifestyle pop.
    Prices up, volume down.

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