When is the real-estate market going to
crash? Listen, if you want to understand how markets work, it’s a lot easier than
you might know. And in this short video, I’m going to teach you everything that I
know so that you can better understand how to time your real estate in the
market. What is a home really worth? Well, it’s
actually worth what someone is willing to pay for it. Which means that as the
market goes up and down, real estate market would go up when people’s
perception says, “I’ll pay more for that.” And the market goes down when people say,
“I don’t want to pay for that.” But you know, there’s actually a market force
behind that that is so much bigger and that market force is called population.
It’s basic economic principles of supply and demand. Probably like you learned in
college in high school. Supply and demand essentially means that when there’s too
many people and not enough of houses, the market has to what? It has to go up. And
when you don’t have enough people, but you have too many homes and no one can
buy them, guess what happens to the market? The market goes down. Notice it’s
done erratic like the stock market. Stock market is crazy confusing. It corrects
itself every 8 years. Real estate corrects itself every 15 to
20 years. We’ve been tracking the cycle for 3,000 years. It’s called the K wave
or kondratieff cycle. And I’m going to break it down for you right now because if you
want to get out there and learn how to hustle and make money in real estate, I
will show you and mentor you, how to make money when the market is up, when the
market is down, when the market is flat. It is always a good time to buy if you
understand these principles right now. Real estate over time does what? You’re
right? It goes up in value. And as it’s going up, it really doesn’t look like
this. I mean, real estate probably more realistically looks like this. And what
that means is that you’ve got moments where the market is running high, you got
markets where the market is running low. What would you call everything below the
line? This is what’s called a trough. And when the market comes down, it must go
back up. So, what do we call this? You’re familiar with the name? It’s called a
bubble. Now, eventually if you get caught at the wrong time with the wrong real
estate and you’re in a bubble, you can lose your shorts. I don’t know why… I
don’t even know where that comes from like you become… I guess you can’t afford
shorts? But maybe a shirt? Maybe like a nightie? Makes no sense. Anyway, bottom
line is that if you do real estate the wrong way, you don’t… Time things right
way then you can actually get into really really big trouble. So here’s a
couple things that I do to keep myself safe.
First of all, let’s understand supply and demand because I really want you to get
this. First of all, when the market is headed down, what does this mean?
This means… I’m just going to say that population is low and houses are high.
Does that make sense to you? Not enough people to buy a house. A home is only
worth what someone’s willing to pay. Boom! That drops. No one’s willing to buy it.
But what do you call it when the market is on the rise? When we’re forming our
bubble when the markets going up, this was because population is high and
houses are low which means you know, if you don’t build for five or seven years
like what happened after 2008. Guess what happens? People don’t stop making babies.
In fact, in when the economy’s bad, people got extra time on their hands.
People are making babies. It’s a little joke there. And so when people are out
there making babies and populations expanding, populations growing, immigrants
are moving in and all the sudden populations on the rise but you’re not
building. Guess what it does? It forces the economy to correct itself. Because
all these people now say. “Hey, remember when the market dropped and the
real-estate value went down and no one was there to buy it?” You wait a few years,
the market will always correct itself as long as population for a given area is
on the rise. Now, in many parts of the world, economic winter happens when
people are not making enough babies to replace themselves. And in places like
Japan parts of Europe, we’re actually having a severe problem where entire
areas are being abandoned. In places like the United States for example, not
currently an issue, not a problem. This is still a place of the American
dream. People want to live here no matter who our president is. So, market goes down,
market goes up. Now that you understand this, how do you insulate yourself? This
part’s really important. If you buy a million-dollar home, this vacillation is
going to be extreme. But if you buy a home under the median, like that average
price for an are. 200,000 , $230,000.
If you’re buying in my range, 100 , 200 thousand dollars. Guess what? This market,
it’s still moving up and down but do you see how imperceptible that is? That’s
called a little bump in the road. “Oh, value dropped $10,000. I’ll survived. It’s
not, I lost $300,000 of value on my home.”
That’s a big problem for a lot of people. Now, the cool thing is, is that if you
understand this, it doesn’t matter where you’re out in the country. Doesn’t matter
where you’re out in the economy. Means that we’re buying real estate no matter
what. And that’s the cool thing about this whole plan is that if we’re in a
bubble, guess what I’m doing? I’m buying like crazy. When the markets flatlined,
I’m buying like crazy. When the bubble bursts, I am buying like crazy. If there
was a time when I was buying craziest, it would be when the market actually pops
because last 5 years my clients have made over 70 million dollars from
the homes I helped them buy during that period of time. It’s a big deal. Now, where
are we at in the market? When is the market going to crash? This is a really good
question. Right now, I want you to understand that in the market, if you
want to understand, when the market will crash. You need to understand a term
called rebuild value. Let’s just say that the median home costs $220,000 to
build. That is actually the hard cost on the commodity of the materials use, the
concrete, the lumber, the bricks, the things that it took to actually build
this thing. Well, when the when the market drops and
no one’s buying homes, someone did pay 220,000 to build that house. But you
can now pick it up for let’s say… Maybe in a really extreme scenario, $140,000, in a really bad market. In normal markets, maybe more like two hundred or two hundred and ten thousand dollars. It’s not that volatile.
I go to the places in the country where you have maximum volatility. They over
built way too much. Everything totally fell apart. So, all of a sudden, you can’t
build this for less than 220 but you can buy it for 140. The opposite, that’s how
you know you’re in a trough in a bubble. When this $220,000 home is selling for 230, I got news for you. We’re not in a bubble.
They’re so close to each other. But when this is like 280,000, guess what? We’re most definitely in a bubble. I watch what it
costs to build a home and what homes are selling for in relation to that
statistic. To help me understand where in the cycle are we. Are we moving up are we
moving down? And real-estate never has a double
correction. In other words, when the market goes up it has to pop all the way
before it comes all the way back up. It’s slow far more predictable than the stock
market. And friends, I hope this video has been really helpful and really helping
you understand the market. When it might crash again? As far as where I think the
market is, we’ve got a short period of time. Probably in years before we hit a
full bubble where we need some kind of correction. Well, the correction be as
deep and as bad as 2008. And all that type of correction every fourth
correction is a really deep one. Last time we had that was Great Depression.
And it’s all speculative. I’m not an expert anymore than anyone else that
hasn’t done hundreds of millions of dollars of real estate and it’s a guess.
We’re doing our best. Though from the principles, that in hindsight we always
know how this looks. If I were you and you want to say, “Kris, is now a good time
to invest in real estate?” Listen carefully, yes, yes, yes. It’s a very good
time to be investing in real estate. I’m buying a lot of homes right now. It is
time to be out there. If you want an expert to Shepherd you and guide you
through this process, if you have money sitting in a 401k, IRA
that you wanted to pull of state, if you want training on how to do it yourself,
click the link in the description below after you subscribe because you are a
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way to the very top. I hope to see you there. you