Market Update

Who wants a real estate market update? I’m sure you do that, Shana Acquisto, she’s a luxury real estate broker. This is not 2008, but rather it’s 2021. We’re going to discuss the differences in the market currently compared to when it was there, because people like, are we going to fall off a cliff? Is there something going on right when you see what’s going on recently?

But it’s cool.  

So let’s go over the differences between 2008 and then twenty twenty one. Then let’s talk about the equity that’s currently in the market and what foreclosures are going to be. And this is a thank you to Mike Shepherd for coming up with this great topic for us, Shep. Yeah. So let’s start with this, Shana. OK, two thousand eight. Let’s rewind back and think about this, I remember.

Right, so this was a time when we had everybody should get alone and it was Nina loans, Sisso loans, you could, like, send in any type of business document and get approved for a loan with no money down or even above LTV, even with no documentation.

So no documentation at all. You would send in a business card and you’d be like, I don’t have a business license, I’m a landscaper and here’s my business card. And you just have your name and email address for like an AOL address on it. Right. And they’d be like, oh, how much do you make? And you would say, I make ten thousand dollars a month mowing lawns.

Do you have any expenses? Nope, just you, just you mowing it. Do you have any documentation. No. And then you could get approved for a loan. It was really a crazy time thing. Yeah. Super, super bad. Right. And during that scenario that it was really crazy. So when we look back it was ripe for a problem, especially with how high they were going and where people were speculating.

So at that point there was twenty six percent. So here’s your staff in two thousand eight twenty six percent of homes. And LTV of one hundred percent or higher. So think about that one in four homes, people owed exactly what the home was worth or more, they had no equity in the home. OK, now fast forward twenty twenty one, a little different fact for you is eighty seven percent. Of people currently have 80 percent or less LTV. OK, so almost nine in 10 people have 20 percent equity in their home right now.

That’s great. Dramatically different scenario. So if something happened, they could logically sell their home. Nine in 10 people could basically sell their home, pay the realtor and have it work out at home prices, come down a little bit and still be totally fine. All right. Verse twenty two thousand eight. If there is any difference, they didn’t have money to pay an agent.

They didn’t have money to pay their lender. There was nothing there was no room in that market. And as soon as prices fell back just a little bit, everybody was crushed because they weren’t investing in their home. They were speculating. So between those two times, there’s been a bunch of different things that have happened.

People became more cautious and they kind of saw these problems and they transitioned from putting too much money in the stock market to putting some money in their home and investing in it and lowering and eliminating things. So when you look at this, what it’s done is it’s eliminated things like PMI, second mortgages, higher interest rates and all those different items.

So that on its own is a huge deal. It is, because most homes now, if you think about it, if they don’t have a second mortgage, if you just compare the two times and you can look at it from one perspective of how much equity people have. And then you could look at the same exact example and. Look at how expensive it is to carry a home, and if you have a second mortgage, that’s higher interest, right? If you have PMI, that’s more expensive as well.

So just those two things on the road are a huge, huge deal because that’s the payment on a monthly basis going up. That’s the expense to carry it in how much it is. And that’s not even considering that now we have better interest rates than we did in the past. So that’s a big deal. It is a big thank you to Mike Shepherd for bringing that up. I think I’m going to have to have second mortgages like, well, right now, many shouldn’t.

Because if eighty seven percent of the people have an LTV of 80 percent or less, right, then you should be able to have done something, refinance out of a high interest rate. Second, combine it in, do something. There’s ways to get rid of it, pay it off early. So the seconds are normally more expensive and the interest rates. Right. And so people have been chipping away at stuff like that over the past. And so it feels a little bit better for them.

I just haven’t even heard of anybody getting a second.

Well, I know that because people have, but it’s kind of crazy LTVs that. That people have saved enough in purchasing these homes to do that. It’s impressive. A much better situation. That’s why I’m trying to say that I feel better about this, even if there’s a price, even if prices settle back in. Right. I’m comfortable with that.

I feel I could still extract it out.

And you can still if you sell your home, they’re even going to have enough to pay a realtor a full commission. And now that’s the top end. That’s nine in 10 people at 80 percent LTV or less. Pretty high in a lot of them have significantly less.

Ok, may I ask where this data came from, Mike Shepherd oh, sent it over to me. Reliable Source. Yes. Now Mike Shepherd referenced as a source as well. So I looked at the article and I read the article and I pulled out a couple of key facts for you.

Ok, thanks. Yeah. Yeah, I was like that. When you guys share information like that, we can share it out with everyone.

It’s good stuff. No, it’s a big deal. So if anyone asks you about things like that, these are great fun facts to be able to spin. They are. And this is a good article as well. Right? The discussion here is something good that you could share on TNT Tuesday, maybe next week you might hit up. What is the market currently like currently? One that we did last time. Yes, that where we talked about the market being good until a certain time in the future. Right.

When I referenced the fall of two thousand and twenty three is when I think we’re going to have a correction next. So. All right. Also, good thing to note is it kind of seems like the world is doing well before it used to be Texas than it used to be these other places that were doing well. And I talked about how New York was having a problem for a while with their pricing. Well, New York’s prices are surging now. They’re way up. They’re having a record setting year and New York City is selling places galore.

Maybe I’ll talk about that soon because you want to have good market data from key cities to show what’s going on. But there’s money moving in from all across the globe to safe havens like New York City. The condos in New York City are all about wealth preservation from other countries and insulating themselves. People don’t actually live in on this, crazy as it is, they just store money there so it can’t be stolen from them by corrupt, corrupt countries.

I would love to know the stat and the amount of. Homes that are second homes or vacation homes in New York City just across the country. I think people are really, you know, maybe selling off a condo, but buying, you know, exchanging it for something different. Yeah, it’d be really cool.

And then the economy is is heating up all across the globe. Right. So we hear about things that it’s busy in Mexico City where in a report back in from you know, it’s busy where Omkar reports in from. It’s busy witness reports and from and we’re hearing this all across the globe, that real estate’s a thing and that it’s up all of a sudden. I’ve heard I heard twice in one day yesterday about St. Barts. St. Barts. Yeah. Should we go?  I am going to check it out, check to get out. All right.

Episode Links

Shana Acquisto, luxury real estate broker , Mike Shepherd

Episode Recorded Live on YouTube 7.6.21

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