Zillow estimates tanking. Investors taking $150,000 write downs on houses.

Wall Street investors are fire selling Homes at massive losses like this one behind me here in Florida the investor bought it 2 years ago they're now selling it for a 25% loss they're taking $110,000 write off on this house and this is a trend that you guys have to pay attention to in the US housing market bu now that these Wall Street investors are selling and selling at a loss that means that the market could go into a free fall particularly the areas where these investors bought up all the homes over the last 2 or 3 years and in this case behind me this is a house in Porta Florida the investor they're called first key homes they bought it in May 2022 for 440,000 and it's now listed for 330,000 they've cut the price they can't rent it out and clearly they're fire sailing that house and so now you have to ask yourself a question everyone what does that do to the property values in the neighborhood like this the values of these houses could go into a complete collapse much like they did back in the mid 2000s home prices in the zip code went down by 43% according to data that you can find on reventure app and I think what's amazing is that so many people in the housing market thought that this wouldn't happen I mean I've been talking about this investor selloff for the last two years I've been predicting it since the middle of 2022 and so many people told me when I first predicted it that I was wrong so many people said that the the investors would keep buying homes forever and keep pushing home prices up because that was what the mainstream narrative was however now very clearly that is no longer happening data from redin shows that investor purchases are down 60% from their pandemic Peak and are at the lowest levels in nearly a decade so we have the purchases of investors way down meanwhile we now have many of these investors selling and in the case of first key homes they own around 48 ,000 properties according to data from prop wire so I went on Prop wire.com and I looked up uh this address and the owner's first key homes and you can see their entity owns 48,000 homes so this is a massive Wall Street investor and I actually looked into more and more of first key homes' portfolio and I found more examples of houses they're selling it's not just here in pagora in Florida it's other parts of Florida it's also in cities like Memphis it's across Texas first key is liquidating many of their assets and we can only speculate at this point why that's happening why this Wall Street investor who's the fifth or sixth largest homeowner in America is selling so many of their properties uh at a loss but it really causes you to think like how big could this crash get is if the big guys if the big investors are now running out of money potentially and starting to sell but what about all the smaller investors I mean there's 27 million homes homes in America that are investor owned homes according to data from atom Data Solutions so that's a quarter of all homes in America are owned by investors the majority of those homes are actually owned by smaller mom and pop investors 50% of all investment properties are owned by people who only own one or two or three only own a handful and then uh about 20 to 30% of investor homes are owned by people who have smaller portfolios of around 10 to 20 homes and so the fact that the big investors are now selling suggests that the smaller investors are also probably going to start to have issues too because the rising interest rates is really the problem here it's the rising rates that are a problem for these investors because it's impossible to make money on rental properties with interest rates where they are today I mean mortgage rate at 7% means that you literally cannot cash flow anything you're going to be losing money if you have debt on a on a investment property at 7% you're going to be losing money after you pay your expenses and collect your rent and so we have more and more of these investors losing money uh on their cash flow and in many cases they can't even rent out these houses that was the issue on the house over there I showed you in the beginning you can see on Zillow they bought it with the intention of renting it out and they couldn't rent it out they just had to keep cutting the rent because this Market here in Southwest Florida it's in a downturn fewer people are moving in the builders the builders here went crazy and the result is the inventory levels are absolutely spiking and I'm going to show you guys this inventory graph and I want you to be prepared for what you're about to see because if if this is happening in your city or zip code to the inventory you better watch out because it means that you're in a downturn you're on the precipice of a crash potentially so in this ZIP code we could see 3 years ago there was 35 homes for sale in this Z code fast forward to today there are around 300 homes for sale the inventory has gone up 800 to 900% in 3 years we are at the highest level of homes for sale that we have seen in at least a decade and so when that happens it means there's a big downward shift in the market and what I would encourage you guys to do at the end of this video go to ww.

Reventure doapp and search your city zip code so you can see what the inventory Trends are in your area because if if the inventory in your area is doing what's happening here you're going to see more houses at discounts you're going to see more houses being sold off by investors at Big losses and what scares me about that investor sell off everyone is that yeah there's 27 million investor own homes in America and maybe vast majority of these investors actually aren't even struggling maybe a vast majority of these investors Own It Free and Clear or have a good tenant and don't have issues but if only I don't know 10% of investors have issues that's around 3 million homes that could be sold off by investors um current inventory on the US housing Market's around 800,000 so investors own 10 times the current inventory levels on the market and assuming that maybe just 10% of investors are in some type of distress that would still be three to four times what's on the market currently and so there's lots of room for uh just even a small number of these investors having issues to then cause a big downward shift in the market and of course this is happening in Florida pretty much more than any anywhere else because in Florida the housing market here is super speculative you know uh it gets a lots of attention during the boom times everyone wants to Pile in all the Wall Street Capital comes here all the builders come here and then when the downturn hits this is what happens when the downturn hits the Wall Street Capital gets hold so the Wall Street Capital stops buying and then they start selling so that causes the market to go down at the same time that the builders you can see these uh new builds behind me I actually just spoke to someone on the other Street uh he said that a lot of these houses here in this neighborhood um are recently built you can see some more over there well then the builders right when the investors stop buying the builders then push all their permited homes over the last two years they push them onto the market they complete them at the exact time that the investors sto buying and that's how you get a massive inventory Spike that causes prices to drop all right folks I'm going to take you to a home building site right now here just down the road because you need to see with your own eyes what's going on here in Florida I kind of just gave you a little bit of a preview with the investor selling with the the home building in this area but there's so much construction right now that you know it's permited over the last couple years you can see the permits in Florida went crazy and now these Builders are getting stuck with these homes some of them are halfway complete and the Builder just is is choosing um in many cases to stop construction I mean particularly in Florida Texas Arizona Colorado you know a lot of these pandemic boom toown States uh the prices are going down and very obvious if you just uh look at Zillow um for even a little while you can see the price is dropping you can see the zestimates collapsing um the zestimate on the house I showed you guys was down 31% over the last two years Zillow actually thinks the house is worth less than the Wall Street investor has uh it on the market for and so one thing I actually think is really interesting and you guys can let me know what you think about this the fact that people now have realtime access to their home value right the fact that people now have real-time access to their home value through this estimate that is new that has never been the case in any previous housing cycle that like an owner could just every day check the value of their house well now people are checking the value of their house and they're seeing it go down and we don't really have um a historical precedent for what that would do to a housing market I suspect we're going to see a lot of owners freak out over the next year or two um particularly like in a city like Boston right where the prices are down 20% you have owners now getting a new reality about what their house is worth they thought it was 500,000 now it's 370 and it's like oh my goodness I'm aund th000 $130,000 poorer in terms of my net worth than I thought I was I think that's something that could cause even more Panic selling on the market in the future and so that's something to think about this estimate the estimates going down this is a new trend in the market particularly here in Florida this is happening right now uh you guys can let me know what you're seeing for this estimate for your house or the houses in your neighborhood sometimes Zillow will actually remove this estimate when the prices get really volatile is it's hard for them to kind of project um you know the prices in certain neighborhoods when the volatility increases and so that's one aspect of this housing downturn that I think is kind of unique don't be surprised if this estimates keep dropping and a lot of homeowners start panicking a little bit when they see that their house is not worth what they thought it was but folks I got to show you this is what we're seeing more and more of here in the market in Florida again we're in pagora pagora is in Southwest Florida it's a little bit north of Fort Myers in Cape Coral about an hour and a half south of Tampa you can see clearly that this house has been abandoned the Builder started construction on it it looks like 2 years ago this house is actually listed on Zillow right now for $800,000 and it's been on the market for 640 days and it's a ghost town and just we're seeing more and more of this here on the market here in Florida and this of course is a a Telltale sign of a housing bust right when you see the builders start to abandon the construction sites you know that the downturn is in the offing and what's interesting is that you know the builders they don't build everywhere and I want to be very clear about this point because I know there's a lot of people who watch my channel you know who don't live in Florida or Texas or Arizona and some of these states you know you might live in New York or Illinois or the mid Midwest or the Northeast in many of these states the builders aren't very active and so you're not going to have as many of these situations of the Builder stoping construction or the big increase in inventory from the new homes and so in that way this housing market is very bifurcated and I want to make sure you all know that that you know just because I say something about a certain area doesn't mean it's necessarily applicable to your area you kind of have to go and do the research for yourself uh on reventure app for your city and zip code so you know what the trend Trends are in prices you know what the price forecasts are and where the market is heading but one thing's for sure here in Florida and in Texas and in Tennessee and in many parts of Georgia in North Carolina in Arizona and Utah the builders went nuts the last two years they pulled a huge amount of permits and now we are seeing the natural consequence of that during the down cycle lots of homes under construction that were abandoned other homes just sitting on the market for sale and what's interesting is there's this perception among many people out there that the builders are healthy and that the builders are in good shape but I'm skeptical of that because the more I travel across America the more I visit these home building communities the more I see these big ominous warning signs and what it feels like to me right now everyone is it feels like 07 kind of or maybe late 06 early ' 07 where we have a spike in inventory starting to occur we have prices dropping in a lot of different cities but we have the broader Market still kind of holding on and we also still have this idea that the economy isn't in a recession among many people they don't think the econom is in a recession or will be in one very similar to the time in early to mid 07 as far as what was going on and it's amazing to me how history can repeat itself uh I think the expression is history doesn't repeat itself but it Rhymes we are not going to see the same exact downturn play out that we saw in '08 we're not going to see as many mortgage defaults for instance we're not going to see as many foreclosures but we're still going to see something pretty big happen because there was just so much speculation the prices just went way too high so much home building so many investors buying left and right so many Airbnb investors right when you have that you just know that there's going to be a correction and in this area here in Porta prices are 25% overvalued so you say to yourself how much could prices crash well if prices 25% overvalued that's a pretty good projection of what the potential downside could be 25% now prices could also go down by more than that because in the last downturn here prices dropped by 43% according to data available on reventure app so important for you to know how overvalued prices are in your Market as well as how much they dropped in the last downturn because that will give you some key insight into the history of your market and the downside exposure that you face as a home buyer investor or even a seller I'm going to tell you folks if you're a seller you have your house listed now you're thinking about listing your house you got to know what the trends are in your Market you got to know what the actual Trends are because if you list wrong in a market like this you know your house can be sitting on the market for a year and you're going to have to cut the price by even more so better to know going in what the direction of prices is and how much downside there is and uh one thing I want to talk to you guys about too is just my perceptions from being here in Florida the last couple weeks you know I've been here for a week I was in Tampa Point Gorda I'm also staying in Miami actually right now and uh I was also here a couple weeks ago in Orlando in Cape Coral and my general perception is that a lot of the people here in Florida like want to leave I mean I talk to lots of people here who are either struggling you know I just talked to someone actually who lost their job about a year ago they moved down to Miami for a job they lost their job now they're trying to figure it out they're trying to make some money and they're living in a really expensive city I I meet people like that I also meet people who've lived here for 25 years and have just had it with the Heat and the cost of living and so I wonder if Florida could be on the precipice of a protracted housing downturn that lasts multiple years and I know that's something that a lot of you don't want to acknowledge or like think about because you know I think a lot of us you know particularly people who are investors or sellers or you know a lot of people want to think like this will be a quick downturn quick correction fed will lower interest rates and everything will be good but it's just not what I'm seeing on the ground what I'm seeing on the ground is a tremendously overvalued housing market where the investors are now bailing and where the builders still have this huge pipeline of permits they're finishing and where a lot of the locals now are priced out and leaving that doesn't leave me with a good feeling about where the Market's heading the next couple years and I'm not saying that to be overly bearish everyone I'm just saying it to be realistic there's very few people kind of who report on the housing market will give you the straight truth you know a lot of people don't want to admit that Florida is in a downturn a lot of people don't want to admit that Texas is in a downturn because those are the two big States for home buyers and investors and many people in the housing market who make money off the housing market and providing Services they cater to people who buy in those States so they don't want to admit what's actually going on you know what I try to do for you guys out there is Prov provide the objective truth because there's just so few places you can get it on the US real estate market right now and you know I I strive to do that as much as I can and it all comes down to inventory price cuts and how overvalued home prices are uh knowing those three data points you can really understand your Market quite well if you're a buyer and investor and so what I encourage you all to do is go to reventure app uh especially if you appreciate kind of this content in these on the ground uh vide and you want to learn more about your housing market go to reventure app if you haven't already sign up for a premium account the cost is $39 a month where you can gain access to all the housing market information for your area so you can make a more informed decision

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