Hello everyone and welcome to another episode of Selling Greenville your favorite real estate podcast here in Greenville South Carolina I'm your host as always Stan McCune Realtor right here in Greenville South Carolina and you can find all of my contact information in the show notes if you need to reach out to me for any of your local real estate needs and just a reminder as always please hit the little like button review subscribe to the show particularly subscribe right that way you don't miss future episodes and things of that nature but if you could just support the show as well by simply liking it just leave a little rating leave a little review I would greatly appreciate if you guys could do that I don't really have anything in particular prepared for this episode I just want to go on a little bit of a rant and we'll just see where this rant takes us OK every now and then I do this it's my show I can do whatever I want and I want to go on a little rant about a major misconception about real estate that I'm hearing more and more and I believe it's mostly Gen Z but it's also some millennials as well and it's sentiment that I'm hearing from them with regard to why they are locked out of buying housing why they are locked out of being able to be homeowners and I'll just start with this depending on what numbers you look at the average first time home buyer right now is somewhere between 37 and 40 years old that is very very old in terms of any historical norm for the United States of America we normally see home buyers much earlier in their in their life than the late 30s or perhaps even early 40s that's highly unusual and that's a phenomenon that's really only happened in more recent years and so you've got a lot of angry millennials a lot of angry zoomers or Gen Z people who you know will just go online and you know get on their keyboards and start cranking out tweets and Facebook messages and sub stacks and all these different things it often times they're trying to predict you know when the next crash is going to happen one of my favorite is melody right who is considered to be a a subject matter expert keeps predicting that a crash is going to happen and it doesn't happen there's another guy Nick's Zarilli or something like that he's another one of these guys keeps predicting a crash is gonna happen it never happens right everyone thinks that 2008 is going to repeat but the underlying fundamentals of the housing market are so different than 2008 and the one thing I always point people to is that foreclosures are and have been for quite some time now near record lows OK that was very different and between 2008 and 2,010 they were at record highs so how do you go from record lows to how do you repeat 2008 without repeating that very important detail and the only way we could do that is from going to from record lows to record highs overnight and I just I don't see it I don't see how that could possibly happen and listen I'm not saying that there's not gonna be a another crash that happens at some point I'm just saying I don't see it happening this year I don't I don't see it happening next year now a couple years out from now you know like 2,028 that's a long time in terms of real estate years you know I'm recording this in January 26th we could certainly see that something in 2,028 but I don't know right we would have to see some major shifts in the market over the course of the next two years in order for that to happen and so that's a that's a groundwork for where I'm going with all of this now here is the thing that I have been seeing more recently because I've been seeing and for some reason I'm holding a pen now I've been this is I'm definitely on a soapbox here I've never held a pen while recording an episode of this podcast in nearly six years I've been doing this podcast so who knows what we're in for here so here's something that I've only heard in more recent months right I've been hearing the doomerism that oh we're gonna have a 2008 I actually I believe it's melody right that said it's gonna actually be worse than 2008 the crash that's coming it's gonna be worse absolutely no data behind that she might have some data that she believes but no data that in my opinion actually supports the claim okay the so I've been hearing the doomerism for years now it that's a that's a common thing but the thing that has happened recently that is different a different shift is I keep hearing people and this is this is what happens they gaslight you right these doomers they have to keep changing their arguments because their arguments don't work they don't have data they don't all they have is vibes and anger right they're angry because they can't buy a house and they all none of their friends can buy houses and so they have to come up with ways of funneling this anger and channeling this anger and they channel it with bad arguments online about you know why the crash hasn't happened and what's going on so here's the thing the one of the arguments that they made and I'm going somewhere with this one of the arguments that they made for a long time was oh inventory is shooting up inventory is you know here's what we've been waiting for we've been waiting for this crazy influx of inventory once inventory shoots up prices come down right simple supply and demand if you've got more homes for sale than you've got buyers that means the prices are gonna come down and I told you guys for years I've been telling you guys for years that is not what's going to happen this time around for the simple reality that sellers have so much equity in their homes that they don't have to sell for a profit right now everyone wants to sell for a profit nobody wants to you know if they bought a home for 500,000 a few years ago they don't want to sell it for 450,000 now but if they've got 100,000 in equity they absolutely can sell it for 450,000 if they really really need to right and and so this this is a this is a thing that is dramatically different than in 2008 where people they bought the 500,000 dollar house with no money down and then within a couple of years they couldn't afford it anymore and they didn't have any equity in it they were forced to sell and they had to end up foreclosing instead and so that is again a very different thing than 2008 another thing that's very different than 2008 is the way loans have been underwritten the way banks have approached lending and the ability for homeowners to get loans restructured if they run into a situation where they might end up being foreclosed okay so this is why we can have a dynamic where supply inventory is going up but prices are either not going up not going down or maybe in some markets going down a little bit there are some not in South Carolina but there are some places in the US where prices are going down a little bit Louisiana has had some of that Idaho has had some of that Texas Florida has had some of that and so it has happened in a few places but for most of the US prices are still going up despite inventory going up what in the world is going on there and so now what you know as these doomers have realized that their whole premise right they were waiting for all of these years for the bubble the real estate bubble to pop and they said here's what's gonna cause it to pop rising inventory and it didn't happen and if you listen to last week's episode you know that assuming that this follows my market stats episode for the for the month of December the December market stats if you're listening to that then you know that actually inventory has kind of sharply came down in the month of December in Greenville and I already said I'm gonna be tracking that super closely cause that's an interesting turn of events if that trend continues but as the doomers have realized that their entire premise is wrong they've shifted to a new phrase that I've been hearing this is the whole Genesis of this episode is me just being angry about this thing that I keep seeing and hearing people saying and it's this we don't need more homes on the market and we don't need lower mortgage rates we just need prices to go down okay we don't need more supply we don't need lower mortgage rates we just need for home prices to go down okay sure I I get that that's what you need but the implication with all these posts is that's not just what we need that's what's actually going to happen and they have absolutely no data no model no substance behind how this is going to happen how we are going to somehow see prices on real estate go down the only way that prices go down is is with increased supply and guess what even though I just said that prices haven't for the most part gone down with the increased supply the rate of appreciation absolutely has gone down so it has had an impact there just hasn't been enough supply to hit the market to force the price down and because of a dynamic I said before where sellers are not forced sellers they don't have to sell their home for pennies on the dollar so they don't have to let's say that you're you know you are that homeowner that bought your home for $50,000 and let's say that now it is worth only 450 you bought it for 500 you do are you gonna sell it for a loss of 50,000 most sellers are just like no I'm just gonna stay here I can afford to stay here I can restructure my loan if I need to I can do all sorts of things and so there's no there are very few forced sellers in this market I've already I've already told you guys that in the Greenville market if you listen to my content the Greenville market we have a total number of foreclosures the past year that sold was less than 1% Less than 1% of our sales in the Greenville market were foreclosures it was like half a percent that's crazy you're not you we need foreclosure if prices are gonna go down foreclosures are the only way that that that happens it's not happening guys and so this is what's so frustrating to me is all of these I I understand the anger I understand why people that are you know in their in their early 30s and they've just been on the hamster wheel trying to buy a home trying to raise a family trying to or maybe trying to get to the point where they can have a family trying to trying to work the way up the corporate ladder and there is no end in sight there's no light at the end of the tunnel I completely understand why they're angry and they just wanna go online and just say well everything's this is all just a myth everything's gonna come crashing down prices are going to come down and it doesn't matter that they haven't come down despite the increase in inventory OK if that makes you feel better great but it doesn't work it doesn't work because you're ignoring the core concept of supply and demand this is how it works and what I'm concerned about is that these people who are already showing that they have a lot of NIMBYism right NIMBYism stands for not in my backyard ism they don't want homes to be built and so this could be a new argument for why we shouldn't build homes there's already a bunch of bad ones out there this could be a new one that is like well building homes doesn't help housing affordability so why build homes that's where I could see this going and that would be a really big mistake that would cause housing affordability to really go in in the wrong direction right we just we're seeing housing affordability get we've seen it get a little bit better the past few years as incomes have come up and homes haven't appreciated at the rate that they had been mortgage rates came down from 8% down to right around 6% and so these things have all allowed housing affordability to go in the right direction but if guys if we stop building we're in trouble the housing affordability immediately goes through the roof right in a bad bad way no longer the the concept of of affordability is is gonna be completely gone if we do that so what it what even is the implication that that people are making when they say we don't need more homes on the market we just need home prices to go down the only thing I can figure that these people are implying is that sellers are overvaluing their homes now that is true okay every seller every seller I shouldn't say every but I mean listen if I take 100 listing appointments in a year people looking to sell their homes 95 out of 100 are going to overvalue their homes that's just the way it is we all think our home is the best home in the neighborhood we all think our home is you know has gone so high has gone up in value and we've done so many fantastic updates that none of our neighbors have done and our homes clearly worth more than theirs I mean look our yard so much more level then the neighbor's slope yard like come on like doesn't that add like $50,000 of value you know these are the sorts of things that that I hear in my job all the time all the time and so if they if the implication by these doomers is that homes are being overvalued by sellers yes I agree I fully agree the problem is it doesn't matter it literally does not matter um again if you if you have let's say that you have let's go back to the example I've used a few times someone that bought a 500 thousand dollar home they're assuming their home has gone up in value so they're valuing their home at 5:25 but it's really worth 4:50 the only way that it matters that they have overvalued their home is if they're not able to sell it for 4:50 and then they end up foreclosing and I just now just mantled the whole argument that that's going to happen yeah in in niche cases right half a percentage point of homes in Greenville that sold were foreclosures so yeah it happens every now and then but it's hard to buy those foreclosures right you're competing with a lot of people like there has to be a whole lot more foreclosures on the market than there are right now for it to make any dent in the market you know what 2008 was like so you can go on right now you go on HUD Home Store be careful because there are some knock off sites that take advantage of that name because it's kind of a cheesy name to be completely honest but the but HUD our government housing and Urban Development has a cheesy named website called the HUD Home Store if they still named it I don't know if Trump has changed that or not but last I was on there it was still called that and I think it is still called that to this day so back during the recession I was looking for housing right I was looking for my first home I was renting I was tired of renting I was like I was determined to become a home buyer to fulfill the American dream for me and for my family that was like my No. 1 priority in life I would go on HUD Homes store this is circa 2,010 I would go on there and you could scroll for pages upon pages upon pages of homes that were in foreclosure that were for sale and that were just sitting there for months at a time now if something hits Head Home store it's sold just like that it there is no inventory there is no foreclosure inventory it just doesn't exist and so this is we are in such a different dynamic and there are people that make a lot of money writing these doomer articles because there are readers there are people dying for this they are dying for a home crash right they're dying for us to have a a an implosion of the real estate market so that they can finally buy their home but that that's a problem too right because the economy goes where the housing market goes and part of why the economy has felt so bad the to a lot of people the past few years that the housing market hasn't been very good we've been in a housing recession for several years now and even though we're not in a economic recession in the entire economy you hear people all the time complaining about the economy and it's because a lot of the fundamentals in the economy are bad and a lot of that you can trace back to the housing market I'm not gonna get into the weeds on any of that but that's true and so you where I'm going with that is you run into a situation where the people that that want this housing market crash to happen would probably end up get having to take pay cuts maybe lose their job or you know maybe be in another situation where maybe lending it gets a lot tighter because that happens in in recessions as well they might not even be able to afford a loan there's no guarantee that if a home crash happened that any of these people watching the home crash would be able to even buy a home a lot would have to happen for them to be able to do so I'm sick and tired of this narrative there are there are so many narratives out there that just had me angry and I again this is my show this is not a Greenville specific episode even though it you know like I said I'm talking through I always tell you guys whenever I do an episode that's like on a on a meta level right we're talking about something that's about the entire housing market here it is through a Greenville lens right if you're in Louisiana if you're in Lafayette Louisiana right now and you're seeing home prices dropping 10% year over year different ball game right that is a different ball game from some of the numbers that I've seen coming out of the state of Louisiana now I actually saw some numbers recently that maybe they've turned the corner on that and maybe they're maybe they had the correction that they needed and now they're going back in the right direction I don't know that's not my market I'm a Greenville Realtor I try to keep track of nationwide trends to a certain extent but I don't follow them you know that closely if they don't impact my direct market but all of this is specifically through a Greenville lens but I I'm just tired of it I'm tired of hearing it I'm tired of seeing it I'm tired of these people getting like some of these people are getting on national news for their views they're writing books saying that this crash is coming and it's just all a bunch of baloney and quite frankly I'm sick of it we need to have you guys know I'm a data person and if you just go out there just spouting off all of these vibes and all of these feelings and all this anger but you're then drawing conclusions that the real estate market is going to do something or not do something on the basis of your vibes and anger no miss me with that I need some data and the data tells me that unfortunately the millennials and the and the zoomers that are locked out of housing right now listen you guys are gonna have to figure something out that isn't waiting for the real estate apocalypse to happen cause the real estate apocalypse might not be good for you when it happens probably won't be good for you when it happens if and when it happens and it might not happen for a long time we don't know you know 2,008 style crashes don't happen every other year it's pretty rare right that was like a once in a generation recession maybe twice in a generation recession but it's pretty rare so if you're locked out listen I feel bad for you don't hear this and hear that I'm angry at you for being locked out and that I'm not sympathetic I'm angry at you for shutting off your brain and focusing on your anger rather than on trying to figure out a solution what are the solutions well one solution is to move to more affordable market yeah some people might have to do that another solution obviously is to be willing to put a lower down payment right maybe if the cash to close is your problem you might have to put a lower down payment another solution you might have to look at loan options that that maybe you haven't considered before right maybe instead of a 30 year loan you're looking at a five year arm seven year arm something like that you know that maybe you just have to start with a starter home may throw out your old conceptions and you know maybe you're buying a mobile home guess what mobile homes do appreciate at least in Greenville they do why because the land that they're on appreciates and so as the land appreciates the home appreciates with the land right because you don't sell one without the other I mean you can take the mobile home that's been detitled and you can retitle it as a motor vehicle and then move it off the land sure you can do that but not what we're talking about here so there are some things that you can do right obviously there's always the getting a second job and all of that nobody wants to do that and I'm not recommending to anyone to do that right that's tough that's a difficult life to have to live but for sure the answer is not to become a keyboard warrior and be quick clacking away telling people about how even though supply is going up doesn't matter we don't need supply to go up we just need prices to come down and they're going to oh they're going to no get out get your head out of the sand stop being delusional and actually pay attention to what is really happening in the real world start listening to real experts rather than these armchair economists that have no idea what they're talking about that are not analyzing the real estate market that start with their conclusion before they start looking at the data and then try to warp the data to fit their own conclusions I don't do that you guys if you guys have been watching or listening to the show for a long time you know that I let the data inform my content 100% of the time and there's a reason for that it's because I I don't come in on here to tell people what they want to hear or to tell myself what I want to hear I want to actually know what is happening what's happening in the market is it a buyer's market that's great for my buyers is it a seller's market that's great for my sellers listen I'm okay either way now a market crashes it hurts right but I've got a lot of investor clients that would that would start going crazy if the market crashed I'm gonna be fine either way and I don't mean that in a bragadocious or a or a conceited way I'm just saying my point in saying that is that I don't have an agenda here but these other people do these other people putting out all this content and getting these YouTube videos with millions of views and the YouTube videos are monetized so they're getting money from all of those views those are the people you need to watch out for because they are twisting the data or selectively using some data over others or in some cases using no data at all stay away from those people alright that's the end of my rant thank you guys for watching or for listening love each and every one of you please like rate review subscribe check out the show notes the show description for my contact info if you need a realtor in the Greenville area and we will talk again next time!