So today we're going to talk about the fate of the US housing market
and we're going to talk a little bit about the renter side or investments.
We're also going to talk about the homeowner side as well.
And be sure to stay to the end because I have a chart
of the entire United States that you're not going to want to miss.
And as always, if you guys like this, please subscribe Hit the like button.
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Because I'm enjoying doing all these videos for you.
So fact number one, this is the monthly supply of houses
and the United States as they're delivered.
As you can see, these went up and down over the years.
These gray areas represent recessions.
Most particularly
I want you to see how these recessions created a boom and bust and of course,
created a decline in housing supply in each of these respective cycles.
And of course, here we are today, significantly lower
than you've seen in the past 30 to 40 years.
So for you investors and you homeowners, this is called fact number one.
So next, we're going to talk about housing inventory.
These are active listings in the United States.
And these, of course, could be new home supply, but
they could also be existing home supply that is actually being listed.
So it should be no secret that listings are going down each and every month.
And we're obviously at all time lows, which has created
pricing, low supply, high demand, higher price.
At the same token, we also have a very low supply of delivered new housing,
which also contributes to the low listing supply.
So where does this lead us now today?
Right now, to date, we are a little over 5 million homes short
based on the numbers I just showed you from new housing supply being delivered.
There are two key points that I want to show you here. One.
2.3 million American households were formed
from January of 2012 all the way through 2021.
But just 7 million single family homes were built during that period.
As you saw in the prior graph, so single family home
construction is running at its lowest pace since 1995.
So we have a growing population, a decline in home inventory
added to supply a low supply of listings because of affordability issues
which creates not only a shortage of over
5 million homes but a housing crisis as far as price.
So I love these three graphs of causes of facts and solutions
because they break down
some of the things that could be happening as a result of this housing shortage.
My suggestion to you is to go through each of these categories
and see what you can do as an investor or a homeowner
to try to be ahead of this curve because these things are definitely have.
So let's just take a look, a fact.
People can no longer afford rent.
Yes. We're starting to see rent control and rent cap all over the place.
And states have enacted rent control laws, which we'll talk about later.
People may no longer be able to afford electricity, homelessness.
These are all effects that are happening right now.
So now let's move to the solution.
Social and public housing, which I know is being talked about,
but they're not doing much about building smaller homes.
Definitely happening. Relax. Zoning laws.
Definitely happening. Rent control.
We're going to talk about that in a minute.
Definitely starting to come up.
Governments having to buy land and real estate just to provide affordable housing.
One reoccurring issue here is government
support for renters in case of financial crisis.
I believe that the government had a hand in creating this housing shortage
because people want to build,
but governments have made it harder and harder to do so.
There are numerous articles all over the Internet about impact fees
and zoning and regulations that developers have to do before they build.
And so in a lot of cases, they just go somewhere else.
The problem, of course, is that now there's no supply of new housing
and it creates rents to go up and housing costs to go up.
For someone just to even build something.
Now we're facing an even bigger housing crisis
because developers and contractors can't afford to build housing cheaply.
Therefore, some of the solutions, not necessarily
good ones, are going to be in this category here.
And you, as a real estate investor, need to understand what's happening today
so you can prepare and invest in the right market.
So one of the items, of course, is rent control.
And I think it's important that you take a look at the actual definition.
It's a legislative project that allows governments to determine
maximum limits on annual rent growth in certain areas of cities and state.
Once it's enacted.
The rule restricts landlords from charging or raising rent or lease rates
past a certain percentage.
I'm going to tell you right now a solution is needed, but this isn't it.
We definitely need something to assist the renters.
And it's not rent control.
The one thing rent control does is it diverts investment to other areas.
Think about it.
If you're investing in some market and the government says
you're only going to be able to raise your rents a certain amount
and they're able to raise property taxes the way they want
and utilities the way they want and expenses the way they want.
Why would you invest there? Rent control.
Has proven in the past to deteriorate property investment.
We're already starting to see this happening around the United States,
where local governments and Supreme Courts are coming after private property.
There's going to be a lot of debate around private property
versus rent control over the next several years.
What you guys are going to see is massive political pressure around
homelessness, around rent increases, around all kinds of issues.
And their solution is going to be things like rent caps and rent control.
Now, of course, this is rent controlled by state,
and this is a great graph that was done by the National Multi Housing Council.
So inmates see dot org that I love because it talks about
which states are more landlord friendly, which states are more tenant friendly.
This chart should be a road map for you real estate investor to kind of see
what the political pressures
are in certain states
and what the government officials are doing in those respective states.
So as you guys buy properties, raise money and invest
These are things that you should be looking at because
these laws in some states are very relaxed.
And in other states they're very restrictive.
And your returns can drastically be changed
if you're doing some kind of a value add in one of these states and you're
restricted on how much you can get for that value add itself.
Therefore, leaving that same property back in its original state,
for those of you know that I love Buckminster Fuller, he had a saying, don't
fight the forces but work with them as you start to see these different kinds
of laws and restrictions around landlords or property owners.
Now you can make
better decisions around that and not have to work against the forces
but with the forces and still provide good investments
and good housing for yourself and for your investors.
Again, thanks for listening.
Make sure and smash that like button subscribe button,
because these things are really fun to put together.