Contrary to popular belief the United States real estate market

is not the same across the board.

People are just not as anxious to buy.

And the, main reason is interest rates,

The real estate market is now settling back into what it always has been

have you asked your employer if you're allowed?

where are the best places to live in the country.

Talk to somebody who's local to where you are looking to be to

find out what is actually happening.

I don't accept the premise that a real estate crash can't

happen in multiple forms.

We're outside of Philadelphia.

When's that crash going to happen?

Is a crash going

I left my crystal ball in the car.

Can I go get it?

I left in my backpack that I left at home.

Welcome back to Millennium, everyone.

What do we got today?

So Talking about how everybody has thought that the or they're

waiting for the market to crash You But it already has, just not here in

mean by that?

So we were actually talking to one of our other lenders and

she made up a really good point.

It's one of those things like, I knew the facts but didn't process it in

this way where you know, everything like waiting for the market to crash.

I'm waiting for prices to start going down.

Cause people don't want to pay these like above ask prices and

all these interest rates and blah, blah, blah, blah, blah, blah, blah.

And all the competition.

And we get stuck in our Pennsylvania bubble of how things are in our

market, as we should, because that's where we specialize and,

maybe it's the way things are here.

And.

We have not experienced a crash in any way whatsoever.

And that's not on the horizon anytime soon either.

But in other markets across the country, like the crash has

already quote unquote happened.

so I was talking to a referral partner of mine, Wisconsin, and we

were just talking about our markets or I saw like on our Facebook about.

What their market was trending.

And I saw that there there's a statistic you can look up of percentage above or

below ask the houses are selling at.

And there's was below it was probably like 95 percent of ask

price or something along those lines.

And I said, really?

That's interesting . That sounds

So I like got to asking like more questions.

I was like what's your average days on market?

Cause you know, you can go back like multiple episodes in our did I, was

it was

estate and dating one?

Yeah.

We talked about, longer days on market.

tends to raise more questions than usually.

It's you have more negotiation room longer.

It's been sitting chains are, there's probably a reason for it.

And then you have more negotiation room to be able to like offer under ask.

And I'm like then what's your days on market since they normally correlate.

So it's about 14 days or so, like about two weeks.

And I, when you told me that, I was like, Oh, bless you.

Bless your heart.

I'm like, I would love to be able to give buyers 14 days chance to

see a house instead of 14 hours.

It's not that bad,

is.

It's back.

It is.

Yeah.

By the way, the day of this being recorded, because it's just ever

changing week by week, it is currently April 2nd when we're recording this.

So that's what it is right this second.

We're right

right in the middle of the spring market.

It, the competition and the activity always

Last week, I went to see a house.

It went active on like a Tuesday.

We went to see it Wednesday, and I went to put in the offer Wednesday

night, and we missed our chance by two minutes, and it wasn't being accepted.

was supposed to show a house on Easter Sunday, and it was on

the market for, what, 36 hours?

And he just, and he had, and he admitted he had a bunch of offers.

Or a bunch of showings and they just canceled them and just

took the thing off the market.

I don't

And that was an agent that I knew.

And I tried to use that into our favor.

I was like, Hey, I didn't accept his offer though the last time.

So it wasn't,

so No, but I know him too.

Not well, but yeah, you try to leverage those personal relationships.

But no it's in the Philadelphia area.

It's very competitive.

So let's talk about why Philadelphia is very competitive still and why some of our

colleagues across the country Are enjoying a, let's say, let's just say a different

market because the longer property set, the less great it is for sellers because

buyers are getting leveraged back, but let's talk about real quick for everybody.

Why we think that

and i'd specify the like greater philadelphia area

because actually the philadelphia

Philadelphia city, every urban center in the country is a

different, is different than suburbs.

It's just different buyers, different environment.

Schools are different.

Jobs are different.

So yeah, so inventory is different.

So we're talking about the suburban Philadelphia area, which is where

we focus our businesses, but yeah, let's talk about across the country.

Why are there different real estate ecosystems that are environments

or scenarios that are playing out?

Yes.

Tell us all about it.

No, you tell me about it.

No, you tell me about it.

I don't

I'm the one, I'm like the economics dork on this fricking

That is economics.

It's not having to do with economics.

I feel like I'm gonna be branded as the as the nerd.

But

nerd.

It's okay.

Nerd.

It's fine.

I'm a peace with it.

I'd rather be a knowledgeable nerd than a dumb ass.

So basically what contrary to popular belief the United States real estate

market is not the same across the board.

There are 145 million housing units in this country.

Do you know

Now I do.

spread across a population of 300 and I guess what now?

340 million people across 50 states and a continent.

It stands to reason that not every single local real estate market will be the same.

Now, a lot of times when you get these big swings in the market where, we've

gone through the last three or four years where everything is really selling like

crazy or something post great recession, where things are really slow across the

country, you can get these big swings.

like kind of mega trends, but what is happening now now that the COVID boom

is over interest rates have gone up.

We are starting to see these other real estate markets settle

into where they should be.

So high demand areas are still going to be high demand, low demand areas

that were being covered up by a lot of COVID demand are now showing themselves.

So your friend in Wisconsin is she in like Milwaukee or is she in

Madison or is she out in the sticks?

Milwaukee area.

She's in the Milwaukee area.

If you've got a property in downtown Miami or you have a property in downtown

D.C or Boston suburbs, Philly suburbs, San Francisco suburbs, even you are

still going to see a lot of demand.

The further you move out, which are not, it stops being the suburbs as we

now call the exurbs if there's just not as much demand to live out there,

exurbs, so they're the outer rim of, and it's really where a lot of newer

development and builders spend most of their time because land is too

expensive, closer to cities There, that's where expansion happens the most

during a boom like we just went through.

But it's also where the contraction happens the most.

So if you're out in the middle of nowhere, Indiana, you're not

going to see as much demand.

You're not going to have bidding wars in the middle of Indiana anymore.

Real competitive space to be in.

Yeah, exactly.

So that's one of the reasons why things are slowing up.

People are just not as anxious to buy.

And the, the main reason is interest rates, but also a lot of the

migration and the reverse migration of people needing to live near jobs.

So what happened?

I always use Boise as an example.

Boise is this, it's the state capital of Idaho.

I'm a capital

That one I knew.

It's

It's the only, only really town.

Do you know another town in Idaho?

Nope.

No.

I thought about it long

I digress.

A perfect example of what I'm talking about with the migration with workers

is that there was a huge, move of people from Seattle and Oregon and

from California and Denver to Boise, and the, I guess the suburb suburbs of

Boise during COVID because people were able to move, they were saying, you

don't have to come back to the office.

A lot of these big tech companies have either a laid you off, or

they're saying you got to come back.

They're finding after a few years of productivity is not as, you strong.

So Boise is like the bellwether for what I'm talking about, where people were

able to move out of their main town.

They were able to get a cheaper house.

It artificially made Boise like a really attractive place.

I've got some anecdotal stories where a lot of people didn't realize when you move

there and you try to zoom there all day and then you've got all your neighbors

are trying to zoom from there all day.

There's not the infrastructure or the bandwidth, like with the wifi

and the cable and all that stuff.

So that was a major hurdle.

But if you take it on a smaller sense, let's take your Milwaukee example.

Let's say somebody lived in the I guess the wealthy affluent Milwaukee suburb.

I don't even know what that is.

And they moved to the excerpts.

They moved 20 miles East or well, I guess in that case it'd be West.

Cause Milwaukee's on the, on Lake Michigan.

If you moved it, you move 20 miles, what you get in a better price and

you get in probably a little more land, get a little more property.

But the problem is that a lot of times.

people have now been called back to work.

And whether they have to move or they have to commute, the effect is the same.

You simply can't live wherever you want anymore.

just good advice to give to any person who considers moving or

buying, is to first ask them, have you asked your employer if you're allowed?

Have you asked if there is any foreseeable change of having to return to the office

if it is somebody who works remote?

Yeah, and make sure you as someone high up in your company because a lot of

managers will I haven't gotten any word.

So go for it.

And then all of a sudden, oh, there's some email that comes through on a Sunday night

saying, Oh, but effective in four weeks, everyone has to come back in the office

you close in three weeks.

You close there.

So that is a big that's a big thing.

And that whole word salad that I just went through really is describing

why real estate is attractive.

And what I mean by that is like jobs, highways.

Good schools, people, the The real estate market is now settling back into what

it always has been where attractive areas are attractive and these kind of

exurban, remote areas were great during COVID because everyone thought, Oh,

we're never going back to the office.

Humanity is changing forever.

And the same thing with like people moving out of the city, they're like,

no one's ever going to live in cities.

Imagine making those kinds of life changes during an

unprecedented time in the world.

I remember I wrote a blog article in April of 2020 and it was, everyone

was saying the cities are dead.

No one wants to live in the cities.

And I'm like, you don't understand history.

Like cities have been destroyed.

People still live in Nagasaki for Christ's sake.

It's like people like that town got hit by a nuclear bomb

and people still live there.

It's it's going to take a lot more than a pandemic for people to flee cities.

And the reason is because there's a lot of.

Money there and there's a lot of jobs.

It's expensive.

And depending on your city of choice, the crime rates can vary.

But it's never gonna stop.

People are never gonna stop living in cities.

They haven't since the beginning of time.

So do you know why people started living in cities?

No, I'm not going to do that.

No.

Go ahead.

Now

whole other fricking podcast.

It's a whole other project that has to do with animal husbandry.

I won't get into it.

Let's keep this episode short.

Do you know why people started living in cities?

the big bang.

Yeah.

No.

So that is a major reason is the work work life.

The other thing is just the oldest story in real estate.

world is overdevelopment.

People built too many houses and now there's the builders

have too much inventory.

So this is happening a lot in the Southeast.

It's happening a lot out West.

Like I remember I played golf with a guy in Southern Utah who was built.

He was helped building.

He was partner in like a 450 unit, like every house there was like 4,

000 square feet in Southern Utah.

And he, at that time he was printing money.

but I'm sure after they made the money, he went and did another one and another one.

And like real estate developers, they don't stop until

something tells them to stop.

And my father was a real estate developer.

And I remember him telling me, he's there's no meeting, there's

no meeting between developers.

It's like everyone, it's like musical chairs.

Everybody's keeps building until they get stuck.

And there's no more chairs to sit in.

That has happened in the South.

That has happened definitely in Austin.

I was going to bring up Texas because I keep, there's a

lot of stuff that's going on about Texas where it's like, what you

can get for 300, 000 in Texas.

And it's something that would be like 1.

4 million dollars here.

Yeah no, and but Texas is enjoying a

I wish I was exaggerating too.

And I wish I was exaggerating those numbers.

And I am so

But the Austin Texas market is a good bellwether for and a

good example of how a market can get completely oversaturated.

Everybody was moving to Texas and Florida during COVID and for political reasons

for like quarantine reasons, just for the fact that they have Republican governors.

Pete, it's cheaper.

Yeah.

And, but that has largely stopped now, you'll read your yahoo

newsfeed and it'll say, oh, everyone's moving to florida or whatever.

But the florida, we could do an entire episode on and we might want to bring in

our friend lance down in florida for that.

But They've got a massive insurance crisis.

So when the condo community, you remember that condo building, it collapsed.

So now there's a reengineering requirement for a lot of these condo buildings

that just didn't do them and they were supposed to, they didn't do them.

They're getting massive assessments because these engineering reports costs,

thousands and thousands of dollars.

So you've got a massive insurance crisis in Florida.

You got bad weather in Florida.

The hurricane Ian, like completely swamped the entire state, everyone

thought, Oh, it was just on like by Fort Myers and Sanibel Island.

It's no, basically what happened is the Gulf of Mexico pushed onto

shore and then it dumped 25 inches of rain into the middle of the

state, which is a swamp already.

And backed up, like there were places flooding there, like no, no one had

flood insurance, that type of thing.

So you have environmental things, you have insurance problems, but here's the

thing, is that it goes back to where are the best places to live in the country.

It's obviously very subjective, right?

just going to say it's extremely subjective, because what

is more, what's important to you?

Do you need to be in a city?

Do you want to be in a city?

Do you not need to be, and do you want to be in the outskirts,

and is saving some more money?

on purchasing the home more important to you or is convenience to major

highways more important to you and that list can go on and on

Yeah, the four major things that you you want to think about

when you're moving to a city, and I just wrote a blog post, www.

sethanything.

com

plug

plug is the it's taxes, schools, crime.

Access to jobs.

It's really those four things.

And if you live in any of those things is out of whack, it's generally not going

to be like, if you live in a real high tax area, it's going to cut the knees

off of the buyer pool, high crime area.

That's obvious.

Bad schools.

Aren't great.

It's not going to be a magnet to bring people in.

So that is those four things generally are pretty attractive in

most suburban areas of this country.

Yeah.

And the real big one is schools, school, the suburban

schools of this country are generally better than inside an inner city

or out in the middle of nowhere.

It just is.

So the, that real estate is always going to be attractive.

And I think that the reason that Philadelphia has not seen a

real,

like change in the market and it's still highly desirable

is because of those four things.

And I can't believe we haven't even said these two words, but it's what

all of the market has everything to do with all the time is supply and demand.

Yeah.

As that starts balancing out, things might change, but if there's always going to be

like a need and a want to say, especially school districts to be in certain areas,

then I was going to just keep on rolling.

So let's talk about what we're talking about.

We're outside of Philadelphia.

When's that crash going to happen?

Is a crash going

I left my crystal ball in the car.

Can I go get it?

I left in my backpack that I left at home.

What do you think?

I don't think this real estate market is ever going to crash like

people think crash and they think 2008.

or they just hear crash and they think oh, this can't go on forever it's gonna crash

and home prices are gonna go down and Then I'll be able to get in and then feel

some kind of at least like Regain of power over the choices that they're making.

I think it's more gonna be like a mental thing, but I didn't day like If

we're comparing back to the crash of 08, it's like lending was really loose.

And if you had a heartbeat and maybe a pen, maybe then

you could have gotten a loan.

But like those things have like really tightened in and it's not

going to happen in the way that people think it's going to happen again.

I think that there may be a correction that might happen, but that's not a crash.

Okay.

So that's my prediction.

As far as when a correction will happen, good Lord.

Not

gonna happen this year.

It's an election year.

Oh yeah, it's certainly not going to happen this year.

Powers that be are gonna keep it all just held together

with scotch tape and bailiwire.

wire.

Ask you a question.

Is there a possibility that a real estate crash can happen in multiple forms?

Yeah.

So it

I don't think it has to be a uniform, I'm just, I'm taking the

perspective of, or the perception of the general thought process.

So I see a, what I see a lot of economists doing right now is they're

taking 08 and they're like, it's not 08.

Like our friend, Logan Mohtashami, we should tag him in this.

I'd love to have a chat with him.

He's the chief economist for housing wire and he just keeps sending this is

what inventory levels were like in 2008.

And this is what inventories or levels are like now, meaning we're

not headed for a real estate crash.

I don't accept the premise that a real estate crash can't

happen in multiple forms.

The fact is 2008.

The real reason the economy faltered was because of real estate, but

real estate is affected by other.

economic crises.

Not as much, probably.

I would argue that, a stock market crash isn't going to affect real estate values

quite as much, but I will say this much

a job market

job market.

And that's exactly right.

If people lose their jobs, I don't care how good the schools are, how

low the taxes are, how safe it is.

I don't care.

People lose jobs in mass.

And even the people who don't lose the jobs, they feel less safe.

That is going to affect any housing market.

Now, is it going to create a 2008 environment?

Probably not in a market like ours, but if greater Wisconsin, greater Milwaukee

and the excerpts is starting to soften.

And then we go through some kind of economic recession or a correction

of some kind where people lose jobs, factories, clothes, that type of thing.

All bets are off for those markets as far as I'm concerned.

I think this is a great topic because there's a lot of journalists out there

talking about how the market is this or the market is that and it's all comes

down to the local, your local market.

I, we literally can go 10 miles into the city and it's a totally different market

and then we can go 10 miles north and it's a little different, not totally different.

But if you go up north, north towards Allentown, that type of

thing, it can soften a little bit.

Now you take that over a 50 state, continent wide country it's

You can't speak in masses like

You can't.

everything is so locally driven, and, like independent of what is

happening within it, it's, you can't even say that oh, everywhere is gonna

crash all at the same time, and it's

The only companies that are really have tried to do this it's like a Zillow

or Redfin or they try to give you like your local values, but even then, like

You need to talk to your realtor.

to talk to a real

Who knows that specific area and is keeping an eye on those markets.

Cause like I said, at the beginning of this, it's we keep thinking in

our bubble of like where we're at and it's it wasn't to somebody who

said like crash already happened just in other places of the country.

And it's You're right.

And it's I know that, you get talked to somebody who is like hyper focused in

the area that they're specializing in.

Cause then they can actually, keep you up to date and what

is happening in real time.

we have market reports and we can look at them, but it takes about like a month

and a half to get the prior months Report and things could change by then it's

moving so quickly and even looking at trends It's it could trend differently

again within a matter of weeks.

Yeah,

And I get a lot of questions.

So we had a in my neighborhood, we had a big pub crawl for St.

Patrick's day and everyone's Oh, I heard the real estate market crashed.

And then I'm like, Oh, where'd you hear that?

And I'm like my buddy in Florida said that it's it's, and I was like,

yeah, Florida, all bets are off.

I said, there's some early great areas of Florida are still selling like crazy.

and depending on where you are in the country, there's

also different peak seasons.

Like we were talking to our buddy Lance down in Florida and Tampa and,

their peak seasons are way different than our peak seasons because, ours

are like the spring and summer.

Not so much theirs.

Just talk to somebody who's local to where you are looking to be to

find out what is actually happening.

If you're going to like Yahoo News or CNN or wherever you're looking to find out

what is happening in the housing market.

It is so broad and just so generic and it's

It can even be like neighborhood to neighborhood.

There's in Philly, there are neighborhoods that you cannot, it, the houses are gone.

They're poof.

And then there are neighborhoods a mile down the street who are, it's it takes

a little bit longer to sell them, but most things are still selling in Philly.

If it's priced right, doesn't smell like a foot and it's in decent

location, it's selling in seven days,

okay

like under contract in seven days, not like you list it

and you have to wait seven days.

Like it's completely.

shown

signed, sealed, delivered.

All right this is a good topic.

So the moral of the story here is we basically need to remember

where you are in the country.

You're watching this wherever you absolutely should just consult a

local real estate agent because they're the ones with the goods.

Yep.

All right.

Okay.

See you guys.

Bye.