Investing

The Upcoming 2021 Real Estate Collapse Explained

the-upcoming-2021-real-estate-collapse-explained



Here is my analysis on the 2021 Real Estate Market, what will happen to housing prices, and whether or not it’s a good time to buy or invest in a home – Enjoy! Add me on Instagram: GPStephan

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What will happen to the real estate market in 2021?

This article from the National Association of Realtors, who launched a survey among 20 top US economic and housing experts, predicted that housing would see an increase of 8% in 2021.
https://www.nar.realtor/newsroom/top-economic-and-housing-experts-predict-post-pandemic-rebound-with-continued-job-growth-stable

THE CONTRIBUTORS FOR THIS:
Right now, lack of inventory is a big issue. It’s recently recorded that the number of homes currently listed for sale on the market is at its lowest level EVER RECORDED, going back NEARLY 40 YEARS

Second, we’re seeing incredibly low interest rates.
Rates have NOW dropped below 2.7% on a standard 30 year fixed rate mortgage…which is UNREAL.. and just for reference, last year, mortgage rates were about 3.7%…which is nearly 40% HIGHER than what we’re seeing today.

That also means – BECAUSE OF THAT – home buying demand has increased…and increased…and increased…to a BRAND NEW RECORD HIGH. A survey found that more than HALF of buyers felt like it was a good time to buy because of insanely low mortgage interest rates, so it’s no surprise that’s driving a BIG push for people to lock in a low rate while they still can.

HOWEVER…Not EVERYONE is so optimistic.

The economist, Michael Strain, mentions that, as of recently, 10% of the 8-million single family mortgages backed by the Federal Housing Administration were delinquent by more than three months….along with “These delinquencies are heavily concentrated among loans associated with low credit scores.” 

He then says that this is cause for concern, because the ONLY REASON we’re NOT seeing a “Wave of foreclosures” is because of a provision in the cares act that temporarily freezes foreclosures until 2021.

Well, through September of 2018…the rate of seriously diligent loans was about 3.7%…and, at any given point in time, historically, 8-9% of FHA are behind on their payments by 30 days or more…so, YES, FHA loans more than 90 days late ARE more than DOUBLE what they were just 2 years ago…but, given that – most of the time, almost 4% are consistently more than 90 days late..it’s not AS BAD as we expected.

The data company Black Knight found that 2.75 million mortgages, or 5.2% of all residential properties with a mortgage, were in active forbearance as of Dec. 8.

But, here’s a more broad perspective when it comes to this:

There are 138 million total housing units in the United States – this includes single family, condos, multi-family, and apartment buildings…and of those, 40% are completely owned outright with no mortgage.

Then – of those properties with a mortgage, which is estimated to be approximately 50 million properties…the mortgage bankers association found that that 5.83% are in a forbearance plan, which they say impacts 2.9 million households.

In order for a home to be foreclosed, it needs to be taken over by the bank – and the seller must GENERALLY owe more on the home than what it’s worth, otherwise – the seller would just sell the home on the market to avoid foreclosure. Well, the data company CoreLogic found that only 3% of all mortgaged properties are underwater, which is an ALL TIME LOW.

So, if we assume that ALL 3% of those underwater homes go into foreclosure from those 5.83% of loans in forbearance…that means only 0.1749% of mortgaged properties would be foreclosed on…or, 96,000 total homes.

So, OVERALL…based on the numbers and evidence presented to us…no, a wave of foreclosures is HIGHLY UNLIKELY of ever happening that would “Crash” the real estate market.

For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com

*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.

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48 Comments
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Robert Dunfee

48 Comments

  1. Roman Deity
    July 13, 2021 at 1:17 pm

    This is so relevant now :/ Apartment prices are insane…

  2. FOHnowgit!
    July 13, 2021 at 1:17 pm

    🙄

  3. George Jennings
    July 13, 2021 at 1:17 pm

    Just wanna say man, I’m writing a research 20 paper on this topic for my last few college credits and was really struggling and stressing out until I found this video…thank you and god bless

  4. provishky
    July 13, 2021 at 1:17 pm

    A great year for real state means if you are a normal person you won't be able to buy a normal house.

  5. Felix Dzerzhinsky
    July 13, 2021 at 1:17 pm

    This video is seriously out-of-date. Biden just extended forbearance until 2022.

  6. pogi ako
    July 13, 2021 at 1:17 pm

    I will only believe this youtubers if it will really crash. They didnt even know the 2008 came. They didnt even know the covid to crash stock market. Full of predictions and they are getting paid by you tube lols

  7. Justin Griffin
    July 13, 2021 at 1:17 pm

    I love this guy!! Extremely smart, and very insightful!!

  8. Jill Lin
    July 13, 2021 at 1:17 pm

    The biggest demand for the US Dollar today other than home buying is the government itself. That is sad. I don’t know what this kid is yapping about. The crisis is a near total lack of demand for the Dollar.

    You want to buy an overpriced house in a heavily indebted nation with a weak economy? Good luck with that. Last time I checked, everything is made in China (Asia) and nothing is made in the USA.

    This bull benefits doctors and lawyers and others raiding accumulated wealth, but for the majority of work to live folks ZIRP is a dead end street to utter poverty.

  9. Florence Hudson
    July 13, 2021 at 1:17 pm

    French President Emmanuel Macron on Wednesday announced that a 'limited lockdown' will be imposed across the nation to curb the spread of coronavirus disease (Covid-19.Y’all should develop an online income means and focus more on bitcoin. I have been into bitcoin for a while now.

  10. Frank Halavy
    July 13, 2021 at 1:17 pm

    Misleading title

  11. majid mohamed
    July 13, 2021 at 1:17 pm

    Recently I've been really interested in investing into cryptocurrency ,but It's strange how people talk about all the profits, they've been making through trading of bitcoin, while am here not making any profit at all. Please can Someone put me through on the right path or at least tell me what I'm doing wrong?

  12. Jackyme Gabriel
    July 13, 2021 at 1:17 pm

    Hey Graham, what's the best way to be successful as a realtor?

  13. Max Gill
    July 13, 2021 at 1:17 pm

    The synonymous basketball inferiorly hammer because floor focally wonder astride a recondite shame. old-fashioned, known shark

  14. Bryan Anthony
    July 13, 2021 at 1:17 pm

    Take take you serious because you are still pushing stocks…

  15. Daniel Mayne
    July 13, 2021 at 1:17 pm

    Time for an update ok this Graham?

  16. Linda Chaiya
    July 13, 2021 at 1:17 pm

    Despite the economic crisis I advice everyone to start cyrpto trading

  17. Chase Jarrah
    July 13, 2021 at 1:17 pm

    The dry flood lovely hammer because viscose anecdotally greet minus a heartbreaking radar. breezy, enchanting dancer

  18. Israel Amador
    July 13, 2021 at 1:17 pm

    We runnin outta land buy buy buy!

  19. ASHUTOSH KUMAR
    July 13, 2021 at 1:17 pm

    Very nice content

  20. hason nguyen
    July 13, 2021 at 1:17 pm

    Can I sue this guy for harassment my goal . Look u big mouth

  21. Nosbel Olivera
    July 13, 2021 at 1:17 pm

    Im curious on what your opinion is on commercial buildings?

  22. Paul Uttermohlen
    July 13, 2021 at 1:17 pm

    Graham, I think you will find that as foreclosures resume in high volume, those homeowners who have equity now, will not have equity as the number of available properties decrease. In 2006, 2007 and 2008, people who had equity in their homes saw it disappear. Homes lost value, a lot of value. It will skew your calculations. In Columbus, Ohio thousands of homes lost 40% or more of their value. Homes in all price ranges lost value. Ten or twenty years of equity was wiped out in a short amount of time. It can happen again. Don't make the mistake of looking at what their equity is now. Project what it will be when there is a 200% increase in the number of homes available for sale. Find a way to calculate how long it takes to absorb the volume of ready willing and able buyers. Figure out the point at which the market is balance and what it takes for the pendulum to swing fully in the other direction. Not only is possible but it the predictable result of an extremely imbalanced market.

  23. Jasmine Waldo
    July 13, 2021 at 1:17 pm

    Good God, I’m never going to be able to buy a house 😭😂

  24. John
    July 13, 2021 at 1:17 pm

    The market is artificially inflated since homeowners that can’t pay for their house have been given a pass on not paying for it which is driving up the prices for the houses due to supply and demand.

  25. Chef Byardee
    July 13, 2021 at 1:17 pm

    So should I wait to buy in dallas…..moving there in june

  26. steve unger
    July 13, 2021 at 1:17 pm

    When you do your calculations on the amount of people that have fair amount of equity in the foreclosure you got to factor in the fact that they will sell their homes so there's more homes on the market along with the other foreclosures which usually with a surplus of properties on the market prices decline factor's going to be how much will they decline depending on how many foreclosures come out of the woodwork

  27. steve unger
    July 13, 2021 at 1:17 pm

    1.8 % of homes foreclosed 2008,,,6% are in some form of delinquency as of 2021.. potential of three times more than 2008…

  28. _Ajah
    July 13, 2021 at 1:17 pm

    Thanks for the information!

  29. Stacie Sullins
    July 13, 2021 at 1:17 pm

    now that's it being 2021 could you do a follow up video on this topic??

  30. D D
    July 13, 2021 at 1:17 pm

    honestly any other youtuber asking me to hit the like button is annoying but EVERY frEAKING time Graham says "smash that like button for the youtube algorithm!" my body cannot stop itself from smashing the said like button for the youtube algorithm.

  31. Nico Andujar
    July 13, 2021 at 1:17 pm

    now i just want to build a home underwater….

  32. goofyfoot2001
    July 13, 2021 at 1:17 pm

    Haha realtors association. Find me one article where the NAR has ever said anything bad about the market.

  33. Roberto
    July 13, 2021 at 1:17 pm

    Excellent video, Graham. I love your videos and I must say your narration and delivery is impecable. Really well done!

  34. Mary Bowers
    July 13, 2021 at 1:17 pm

    Have u looked at the infinite supply of real estate in NY, Boston, LA and other major cities? The reason real estate in the suburbs is taking off is because the mass exodus out of the city is causing overcrowding and housing shortages in the suburbs. Zillow is not listing all the preforeclosures that are mounting because there is a covid moratorium on evictions however that doesn’t mean they don’t exist, can u say shadow inventory??? How about the mounting unemployment rate. No job + no mortgage payment = massive foreclosures. A little real estate math for you. Don’t forget baby boomers real estate holdings are about 35 trillion in holdings which is quite a bit. Covid has not been kind to the elderly and as the baby boomers die a great deal of supply will free up. This in addition to other factors will drive a crash. Um yea they owe less than what the house is worth now, but if after the foreclosure moratorium u see those properties hit the market that affects value. I used to sell real estate and I’ve never met an agent who is brutally honest about the market even as the titanic was clearly sinking. The industry will often conceal shadow inventory to control market conditions. This is the usual pump and dump, creating a bigger gap between rich and poor. A big money grab. Sell now then sit tight and wait for the crash, it’s coming. It’s already happening in some areas

  35. THE CURTIS JOHNSON TEAM
    July 13, 2021 at 1:17 pm

    Versatility is key! Great job Graham as always

  36. jram0001
    July 13, 2021 at 1:17 pm

    The Fed will speed up the printer and will give more money to people to prevent the collapse,

  37. Mark Hardy
    July 13, 2021 at 1:17 pm

    Tax credit could cause a race to the bottom.

  38. Destiny Burke
    July 13, 2021 at 1:17 pm

    So basically my son and I are screwed unless I get really lucky finding a foreclosure home.

  39. Michael Prout
    July 13, 2021 at 1:17 pm

    So is it better to buy when interest rates are low and price is high or interest rates high and prices low?

  40. Yoo Van
    July 13, 2021 at 1:17 pm

    I live in SoCal and even if houses foreclose, out of state buyers are just gonna pay a premium still. Banks will know how high in demand CA property is.

  41. Courtney Ricci
    July 13, 2021 at 1:17 pm

    Honestly every landlord has a loophole to evict right now! The moratorium is no longer legally valid because it was presented under false pretenses! They promised it would be TEMPORARY! They lied making this paper null and void! Go lawyer up and take your properties back!!! You’re welcome! The government can compensate you for all lost wages with proof 😊✨

  42. Matt Goulet
    July 13, 2021 at 1:17 pm

    CAR and NAR don’t actually have economists:

  43. Paige SI
    July 13, 2021 at 1:17 pm

    30 year mortgage= life of servitude

  44. R Young
    July 13, 2021 at 1:17 pm

    it would be nice for you to speak slower…

  45. kano 1971
    July 13, 2021 at 1:17 pm

    The big problem is even though some could sell to avoid foreclosure is they won't be getting a new home becuase all the prices went way up so they can't buy back in and they will find that rents now will be at or more then what their mortgage payment was.. a huge disaster the economy is about to get hit by

  46. Massive Spectacular
    July 13, 2021 at 1:17 pm

    This was super helpful!

  47. Robert Clark
    July 13, 2021 at 1:17 pm

    Does anyone think the prices will crash by 2022. Looking to get into real estate late this year but I am young and need guidance. I am mature enough to take opinions without betting my life’s savings on them so please feel free to voice your thoughts.

  48. Alfonso Salgado
    July 13, 2021 at 1:17 pm

    What are real estate agents eating if there are no houses to sell?