The Coming Crash | What Investors are Missing

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Well hello there folks and welcome into this video here today i i want to talk about four very very very very important points in this video essentially in which i see investors kind of getting confused right now i think we have to address this and whether you care about the real estate market or the stock market or money in general i think this is going to be an

Important video because there’s certain things that are going on that i think are very important that people understand uh the right perspective in my opinion to kind of look at these things because i i see when when uh you know either i make comments or other folks make comments that people say well what about this or you know you need to look over here and i

Want to give my perspective on some very important points in this video i hope you guys enjoy this as always hope you get some good value out of it okay so what we’re talking about in regards to today is obviously this like what’s going to happen in real estate over the next 6-12 months which in my opinion real estate is the most important thing to pay attention

To in the overall economy for the next six to 12 months and what transpires there and do we see a major slowdown do we see a crash or does this market just continue to heat higher and higher and higher and where’s the boiling point for this okay so let’s get in these four core points the first one by the way shout out to ftx the official crypto partner me if you

Want to check out the link down there and sign up for an account check out pin comment okay first off this is definitely something i see out there is folks when they hear about a potential real estate crash right or even as a major slowdown in the real estate market they say you know what real estate’s really really strong right now like i go places um you know

I see building everywhere maybe i’m uh in the in the field of real estate of some kind you could be an electrician you could be somebody that you know uh just it deals with building homes in general right and people say things are incredibly strong like why would you even think um you know there’s that sort of scenario you got to understand like we all know like

That’s not that’s not the debate okay the debate is not whether real estate’s been strong because of course real estate’s been strong and of course orders have been like everybody knows that okay everybody knows that you know there’s been a ton of orders for new homes over the last six to 12 months really over the past two years but 6-12 months specifically those

Those homes are being built right now and will continue to be built for almost the rest of this entire year essentially right imagine you put an order in for a home three months ago well guess what that that home’s uh probably still not even being built yet it’s probably going to start being built in a month or two from now so basically as far as 2022 goes you

Got this massive backlog of these previous homes that were bought that have to be worked through now okay because you know i don’t know if anybody’s bought a new home but but essentially like anybody that has bought a new home in the past you know how long the build time is at the minimum it’s like a nine month process but really you’re in this sort of market

With supply chains messed up it’s really been like 12 to 18 months as far as the build time for a home goes okay so think about that some people that place orders on homes 16 months ago 18 months ago are finally just getting the keys at home today okay so this is very very important to keep this in mind that just because um things are are great now and there’s a

Ton of construction those sorts of things everybody knows that and that’s going to continue to be that way for this entire year it’s more about what are the orders coming in in six months from now and three months from now in nine months from now and 12 months from now because that’s what’s going to be what dictates the real estate market in 2023 and moving in the

Future okay and where pricing goes obviously with rates going up and up and up and uh the affordability of homes just plummeting right now like the the homes are not affordable we all know that when you talk when you when you keep talking about mortgage rates going up and up the homes become even less affordable in that sort of scenario which makes it um even more

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Likely that you’re going to see a major slowdown okay the second thing i definitely can hear from folks out there is they say things like there’s no shortage of buyers okay and that’s 100 true this is another point that anything’s worth debating there’s been no shortage of buyers for the past basically about 18 months or so in the real estate market no shortage

Of buyers and if you know prices have gone beast mode there’s no debate around that this only goes up to january by the way i think actually we’re probably somewhere up here now for these prices okay so there’s been no shortage of buyers now the problem with this sort of argument is like that there’s no shortage of buyers right is it it it there’s no shortage

Of buyers until there is a shortage of buyers right and anytime you’re in any sort of asset whether it be a real estate property whether it be a crypto whether it be a stock whether it be gold silver that’s going through some sort of boom cycle some sort of fomo cycle which there’s no doubt you can’t there’s no debating like real estate’s been in kind of a fomo

Cycle for the last 18 to 24 months now right we’ve been in kind of this this fomo cycle that’s playing out at the moment but that’s that’s that’s that’s what’s natural when you’re in a fomo cycle okay but here’s what’s the problem okay let’s say let’s look at bitcoin for instance right the the most popular cryptocurrency obviously in the world probably the most uh

Popular one of the most popular assets in the world right bitcoin went uh from october of 20 from about 11 000 to next thing you know around november of 21 bitcoins trading at oh you know 67 000 68 000 i think it even approached 69 000 at one point on that given day right so during this moment if you if you were a bitcoin bull you could have said easily there’s

No shortage of buyers of for bitcoin like you know we’re going to keep going up because clearly there’s no shortage of buyers for bitcoin they’re just going to keep bidding it up bidding it up being up and we’re just going to continue to the moon right and obviously um that’s not the way this plays out right and since then bitcoin has fallen about 32 right or maybe

Even more than 32 percent since those highs when it was like you know 68 69 000. so think about that for a moment there was no shortage of buyers until there was a shortage of buyers and then it runs out now in cryptocurrencies and in stocks these things run through faster something like a real estate it really takes a longer time to play out i’m talking 6 12

18 months to really kind of play this out you have to let some more time pass crypto stocks those move fast because people can trade in and out of those today right now as we’re recording this video right real estate is not like that real estate’s a more calculated process so the falls usually for real estate or um i would say longer in nature and sometimes take

Much longer to get out of that think about the 2008 uh housing crisis home prices didn’t bottom until it was you know late 2011. think about that for a moment it took years years of real estate prices going down year after year after year after year until finally things bottomed toward the end of 2011 and then started to go up in 12 13 14 and so on and so forth

From there right if you look at a stock like a paypal one of the greatest companies in the world no doubt about it an incredible business model a cash flow machine a growth machine um just beautiful right there was no shortage of buyers for paypal stock for a long time and you could have said there’s no shortage of buyers for paypal stocks so everything coast is

Clear here it’s a great company there’s no shortage of buyers and then there was a shortage of buyers right and where the heck did all those buyers go they were bidding this baby up to 300 they went bye-bye this is what happens in in an asset when it starts to go down um buyers start to kind of say you know what i don’t think i’m going to buy that right now and

It’s going down i could probably get it for a much better price tomorrow next week next month six months from now i don’t need to buy it right now and so the buyers slowly start to say yeah you know it’s because you’re not in that fomo cycle anymore in real estate right now we’re on a fomo cycle where people or there’s multiple bids on homes it’s like you know real

Estate investors are competing for properties you got big companies competing for properties it’s a it’s a major fomo cycle we’re in right now right that happens in stocks that happens in cryptos and it it usually ends pretty darn quickly right and so the no shortage of buyers is not very really a valuable argument the third of these four points i want to make okay

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Inve folks say well you know these investors they’re ready to buy on any drop in the market right any anything falls here they’re ready to buy right so this has been true i think up until very very recently where at least a lot of the investors i know of real estate aren’t aren’t very um you know incentivized to go out there and buy real estate right now because

They’ve seen the the way price had gone up and they know there’s a lot of risk in the market right now i’m somebody that owns multiple real estate properties i have no i have no ambition zero ambition to buy a real estate property in 2022 okay maybe in future years that’s definitely a possibility but this year i’m good i’ve seen the way prices have increased i

Think it’s unsustainable to have those sorts of increases and i think there’s a lot of risk and it doesn’t mean it can’t go up more it’s just kind of like hey you know what i i’m good with kind of what i have now this happens in stocks this happens in cryptos all the time where they can go on some big epic runs right and then you know investors start to say yeah

I think that i think this is i think that’s about it okay i’m going to kind of pull back a little bit now doesn’t mean you sell out of everything or something like that you’re just not as as uh happy to go out there and buy buy buy right and so real estate investors these folks are seeing this right now let’s say we get into some sort of scenario where pricing

Starts to collapse no i’m not even talking about a major collapse five percent seven percent real estate investors if they see fundamentals that are likely to continue to deteriorate over the next 3 6 9 12 18 months they’re not going to run out there and buy because they understand that oh shoot you know these properties are starting to go down in value if i go buy

This today at five percent down there’s a high probability that’s even five percent cheaper in next month from now and if you start to get into some sort of cycle where sellers could be potentially a little desperate to sell a property right you could get in this kind of cycle where people are like you know start having to um the process of the mind for an investor

Starts to say i don’t need to buy it today no different than we just looked at paypal stock right an investor paypal stock might have been very happy to pay 300 for that before 250 but then price starts to drop and drop and drop and it drops to 275 and then 250 and investors start saying you know what i don’t think i need to buy it right now i’ll wait till it drops

A bunch more and then investors looking at 200 like i don’t really need to buy right now and then 175 then 150 then 100 then 93 right and eventually you finally you find a four but when it comes to real estate investors they’ve been there but a lot of them are looking in second guessing kind of that that game right now right it’s very important to understand now

The next point i want to make here is a lot of people try to say what’s going on right now in the housing market right think okay last time we had a really really uh fomo type housing market was 0-407 right that’s when construction was going crazy uh people were obviously buying a lot of homes real estate market was hot realtors did great like it was a great time

For the housing market that’s the last time we really had what was considered like a boom cycle for real estate a fomo cycle for real estate right and so a lot of people like to draw this comparison to that 2004 through 2007 bubble time right this is also another massive mistake in judgment in my opinion right because when you go back to that given time period of

04 through 07 it was a very different loan market at that time see you’ve got to understand at that time you know i remember my parents sold their house in about was that 2000 2001 somewhere around there and i remember on that for sale sign saying zero percent down you could buy a house back then with zero percent down meaning literally zero dollars no lie okay

And so a lot of people got used to putting no money down for homes three percent down maybe five percent down during that time period a lot of folks didn’t even consider putting 20 downs like hey i only got to three percent down five percent down zero percent down that’s awesome right also the requirements for how deeply a mortgage company looked into or a bank

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Looked into giving you a mortgage very low standards at that given moment like literally you could tell them you didn’t ask anybody that that you know did the mortgage process back in those days and they will all tell you dude that was cake they literally just told them numbers like i make 150 you could lie like you didn’t matter oh yeah i make 50 000 a year oh i

Make 200 000 a year like whatever like i know people that literally could get approved for a mortgage like that and just set a price didn’t have to show any confirmation that you actually did that or those sorts of things right and so you had this for this cycle that was going on where folks were were not just buying one property that they probably really couldn’t

Afford but they were buying a second property third property also simultaneously you had balloon payments that hit people in a massive massive way right which essentially almost overnight folks also had to pay a way steeper price than what they were previously paying now this was a massive massive negative for the real estate market because people just started not

Being able to afford it simultaneously you had pricing starting to decrease where folks started saying oh my gosh now i’m underwater on this property i just bought maybe i want to walk away and that’s what you started having you started having short sales you started having foreclosures and simultaneously on top of that you also had a massive recession starting

Which was people losing jobs when you compound all those things that’s how you get a massive real estate crisis right in the city i live in las vegas this is a real estate market that prices on a lot of properties went down over 50 percent over 50 percent from their 2007 peaks through basically where they bottomed out in 2011 some of those properties went down

50 plus and you get that by all those different factors all hitting at the same time and so when i think about today’s real estate market right i do not think it’s the same as i don’t think you can draw conclusions between 0.407 to this because the the folks that are buying homes nowadays are much more qualified than anybody previously in the 04 through 07 crash

Right i would say there’s definitely some spec buying but the spec buying is definitely at a limited amount compared to that given time period because previously to that real estate price has only gone up and so it wasn’t even in folks thought process that maybe prices could fall 30 percent 40 50 plus right that is in the back of folks mind even for some folks

That are taking more risk in this market in this real estate market it’s still in the back of their mind that like dang man you know this could this could come to a conclusion fairly soon we saw what happened in you know four through o seven and we saw what happened in oh 809 2010 2011 in the real estate market and so i think a lot of folks kind of look at that and

Like you know maybe i won’t take quite as much risk as you could and so these are all factors i think that are very important for investors to think about to consider whenever you’re thinking about this potential of a real estate let’s call slow down let’s say if you think there’s going to be a crash anything like that because if you aren’t considering these four

Things um you know we just talked about in this video i think you’re making a massive mistake and these are all four very very important things and i think you know when a lot of people are going to talk about this i you know on the internet obviously in real life friends and family and i think it’s very important sometimes i like to make these sorts of videos

Because i believe these are the sorts of points that you can bring out to your family members to your friends um to people on the internet you might be chatting with to so they understand these points and can look at it from a different view of just trying to say oh yeah this is just like the last housing crisis we went through or saying you know oh you know it’s

Just we got so much more to climb and it’s important to understand these different risk factors on both sides of it and say and this might not quite be like that for this reason or there’s some similarities here okay so yeah hope you guys enjoyed this as always i appreciate ftx obviously ftx us for always being a partner of the channel much love as always let me

Know your opinion in the comment section have a great day

Transcribed from video
The Coming Crash | What Investors are Missing By Financial Education

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