On The Market

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Is College Worth the Cost? w/Preston Cooper

Why the Fed is Steering Us Straight Towards the Next Great Recession

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145: 60% of Homes Classified as “Unaffordable,” How Long Can This Last? w/Matthew Gardner Oct 02, 2023

Show notes

The housing market is now aggressively out of reach for first-time home buyers. Nearly sixty percent of homes for sale are unaffordable to the average American. What’s causing such a lack of affordability? High mortgage rates, meager supply, and baby boomers refusing to sell their single-family homes (seriously). These factors have created a housing market where “forced renter households” will become the norm…but not for long.

According to Matthew Gardner, Chief Economist at Windermere Real Estate, there’s at least some hope on the horizon. Mathew knows the solution to this almost unfathomable unaffordability issue, and it’s much simpler than most people think. In this episode, he talks about the primary driver of high home prices, the factors causing so many Americans to rent, and why we can’t repair this market using the same housing market “incentives” that worked in the past.

And, as someone who works regularly with large-scale investors, Mathew has some advice for those still trying to invest in a market where profits seem improbable. When will mortgage rates head down? How long will unaffordability last? And what’s the solution Matthew thinks will solve it all? We’ll get into all that in this episode!

In This Episode We Cover:

The SINGLE factor that’s causing so much unaffordability in the housing market

Home price updates and a surprising statistic about homes for sale

Mortgage rate predictions and whether or not we’ll see them fall next year

“Forced renter household” formation and whether America will become a renter nation

Crucial advice for ANYONE who’s buying real estate in 2023 (and if you should wait)

And So Much More!

Links from the Show

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Housing is Unaffordable, But Could It Actually Get Worse?

Connect with Matthew

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144: Simple Deals We're Doing That Are Making MASSIVE Profits Sep 29, 2023

Show notes

If you want to know how to make millions of dollars in real estate, skip the rental properties, renovations, and rehabs and go straight for this type of “land investing.” Our own Kathy Fettke is using this type of deal to make MILLIONS of dollars without building a single home or managing ANY tenants. This is all from one piece of land, where Kathy simply needs to put down just under five percent of the total purchase price, and in a few years, she’ll walk away with millions in profits. What type of deal is she doing, and how can you do it too?

We’re back with another deal show as we dive deep into three real estate deals that our expert guests have on their hands. First, Henry will show off a simple house flip that will net him thirteen times his money when he sells. Then, Kathy will uncover the rarely talked about but unbelievably lucrative type of land investing that can make you millions. Finally, James hits on a “dense” flip/development deal that will turn one home into many and give his team almost half a million dollars in profit!

If you want to submit your deal for a future show, post it on the On the Market forums where you can get other investor takes!

In This Episode We Cover:

The type of land investing that can make you MILLIONS in just a few years

Cosmetic flips and why now may be a low-risk time to get in the market

Why “dense” zoning can make you MUCH more money on your next investment

“Deferred interest” and how to cut down on high holding costs

Why the average age of a home seller in 2023 is NOT what you’d expect

And So Much More!

Links from the Show

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Henry's BiggerPockets Profile

Henry's Instagram

Share Your Deal on the “On the Market” Forum

Dealing Dirt: Is Raw Land the Most Underrated Asset of 2023?

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143: How the Hotel vs. Airbnb Battle Completely Flipped w/Jamie Lane Sep 25, 2023

Show notes

The hotel vs. Airbnb battle may have just completely flipped. Post-pandemic, it seemed as if short-term rentals were the only places worth staying when traveling. Having a house with multiple beds, a kitchen, a private yard, and parking was considered too good for hotels to compete with. But, as the world reopened, travelers got tired of cleaning up after themselves and taking out the trash, and hotels began to claw back market share.

With the idea of a short-term rental “collapse” constantly being pushed throughout mainstream media, we brought on AirDNA’s Jamie Lane to give us the facts about how the hotel vs. Airbnb battle is going. Jamie walks us through some surprising statistics about short-term rental occupancy, why things are starting to change in a post-pandemic world, the real estate markets seeing the worst (and best) performance, and how hotels are faring.

For those who have seen their short-term rental markets start to struggle with so much supply and not enough demand, Jamie has some insider-only tips on finding smaller markets where you can still make a decent profit and how owning an international vacation rental may be your best bet as Americans leave the road-tripping and domestic flights behind.

In This Episode We Cover:

The short-term rental “collapse” and why occupancy is starting to fall

The markets experiencing “normalization” as domestic travel becomes less popular

Must-have short-term rental amenities that can almost guarantee you bookings

Hotels vs. hosts and why Airbnb is losing market share to free buffet breakfasts

Short-term rental regulations and how bans will impact hosts in every real estate market

And So Much More!

Links from the Show

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Henry's BiggerPockets Profile

Henry's Instagram

#Airbnbust: The Fall Of Short-Term Rentals

Hosts vs. Hotels: Is There Still Room in The Short-Term Rental Market?

Has the Short-Term Rental Goldmine Run Dry? w/Jamie Lane

Access Up-to-Date Short-Term Rental Data with AirDNA

Connect with Jamie:

Jamie's LinkedIn

Jamie's Podcast

Jamie's Twitter

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142: Did High Interest Rates Kill House Flipping? w/Jessie Rodriguez and Tarl Yarber Sep 22, 2023

Show notes

House flipping profits are off the charts, so why are so many house flippers leaving the market? Top flippers like James Dainard have seen their profits almost double, EVEN with today’s high interest rates. Wouldn’t now be the perfect time to take on more flips than ever? The experts say “no.” In fact, many of them have stepped away from flipping entirely, worried that the risk FAR outweighs the reward.

To give us a more rounded view of this real estate market are Jessie Rodriguez and “I hate real estate but love money” investor Tarl Yarber. Jessie and Tarl have done HUNDREDS of flips throughout the past decade, but now, they’re doing fewer flips than ever before. With high holding costs, an uncertain economic future, and a greater risk of failure, now might not be the best time to start your flipping empire.

But if you have experience, money, or time, you could make some serious returns if you are willing to take the risk. James, Jessie, and Tarl talk about what they’re looking for in today’s market, how to instantly lower your cost of labor on any flip, why so many expert flippers are leaving the business, and why you should “dollar-cost average” in real estate investing.

In This Episode We Cover:

The state of house flipping in 2023 and whether or not now is the time to jump in

Interest rates, holding costs, and how much you can expect money to cost

Why “quick flips” are FAR safer now than extensive, heavy rehab house flips

Why Tarl quit flipping and the signs he’s waiting for BEFORE he gets back into the game

Labor costs and how Jessie INSTANTLY cut down his rehab budget

Dollar-cost averaging in real estate and whether or not it’s a smart move for rookies

And So Much More!

Links from the Show

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Unbelievable Returns from Flipping This New Type of Real Estate w/Jessie Rodriguez

Flipping Houses: How to Get Started and Everything You Should Know

Connect with Jesse:

Jesse's Instagram

Connect with Tarl:

Tarl's BiggerPockets Profile

Tarl's Instagram

Click here to listen to the full episode: https://www.biggerpockets.com/blog/on-the-market-142

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141: The “Doom Loop” That Could Crash Commercial Real Estate w/Richard Barkham Sep 18, 2023

Show notes

The “Doom Loop” could cause banks, businesses, and commercial real estate to crash. With real estate valuations down, property owners begin to default, and credit tightens, causing the same cycle to repeat itself again and again, pulling banks and balance sheets down until we reach a bottom. But is this “Doom Loop” scenario just feeding the fear of a housing market crash, or are we months away from this becoming our new reality?

We asked Richard Barkham, Global Chief Economist of CBRE, his take on what could cause a “Doom Loop” and what we should be prepared for. Richard’s team handles some of the planet’s most comprehensive commercial real estate data. When the masses run away in fear, Richard’s team sees opportunity, and if you listen to today’s episode, you’ll know exactly where the prices are too low to pass on.

Richard gives his economic forecast for the next year, when the US could enter a recession, how high unemployment could get, and where commercial real estate prices are heading. While some commercial real estate sectors are facing dramatic price declines, others are looking surprisingly strong. But with a weaker economy and fear of a “Doom Loop” taking hold, are everyday investors safe from this potential economic catastrophe?

In This Episode We Cover:

he real estate “Doom Loop” explained and what could cause this chain reaction to tank asset prices

The “global slowdown” and recession predictions for 2023 and 2024

The weakest and strongest sectors of commercial real estate (and which ones are underpriced)

Cap rate updates and what will finally cause prices to improve again

Best buying opportunities in 2023 and assets with rising rents and declining prices

Unemployment, inflation, deflation, and what we can expect over the next year

And So Much More!

Links from the Show

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

The Biggest Crash Imaginable is Coming For Commercial Assets

Grab CBRE’s “Midyear Global Real Estate Market Outlook 2023”

Books Mentioned in the Show

Real Estate by the Numbers by Dave Meyer

Connect with Richard:

Richard's LinkedIn

Click here to listen to the full episode: https://www.biggerpockets.com/blog/on-the-market-141

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140: Buffett Bets on The Housing Market EVEN as Mortgage Rates Hit 20-Year High Sep 15, 2023

Show notes

Mortgage rates are ravaging the real estate market, but Warren Buffett is bullish on housing. With interest rates at twenty-year highs, almost any house is unaffordable to the everyday home buyer. And, with rising insurance costs, commercial real estate investors face HUGE policy hikes that are eating away at any leftover cash flow. But is this just the storm before the calm—have the price hikes peaked, and could we be in store for a more affordable market?

All the doom and gloom can seem scary; thankfully, Dave Meyer, James Dainard, and Kathy Fettke have brought their financial flashlights to make things a bit brighter. In today’s correspondents show, we’re talking about Warren Buffett’s latest move to invest in some of today’s top home builders and why “affordable” housing may be where the REAL money is made in real estate.

Besides Buffett, we’ll also touch on the growing insurance crisis across the United States, who it’s impacting the most, and why Kathy’s latest bill jumped 600% (c’mon, Kathy). Could this insurance squeeze make the commercial real estate crash even more lucrative for buyers? Lastly, we’re talking about one of the most underground topics of 2023—mortgage rates. They’re climbing fast, but this could be a sign of lower rates to come!

In This Episode We Cover:

Why the world’s greatest stock investor is putting his money into residential real estate

The ongoing inventory crisis and why we might be in a “2012” market in 2023

The insurance “squeeze” forcing commercial real estate investors out of their properties

How to lower your insurance costs with simple, sustainable home improvements

A mortgage rate update and crossing into the highest rates of the past two decades

Rental property HELOCs and the best lenders to ask for one

And So Much More!

Links from the Show

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Click here to listen to the full episode: https://www.biggerpockets.com/blog/on-the-market-140

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139: Is The Fed Moving Fast Enough to Save Us From a Recession? w/Nick Timiraos Sep 11, 2023

Show notes

The Fed has put the American economy under extreme pressure to lower inflation. Mortgage rates are now at twenty-year highs, job openings are starting to fall, “cautious consumers” return, and a 2024 recession is still in the cards. Everything the Fed wanted is finally happening…but it’s not happening fast enough. Can anything solve the inflation we’re up against?

Few know the Fed as well as Nick Timiraos, economics correspondent for The Wall Street Journal. Nick has been tracking the Fed’s moves for years and has been our go-to correspondent on what Fed chair Jerome Powell could be announcing next. With inflation finally taking a hit and the economy slowing down, progress is finally being made. But this doesn’t mean that we’re out of the woods yet.

The Fed knows the job isn’t finished yet and is willing to push the American economy to extremes to get there. In this episode, we talk to Nick about the Fed’s next moves, mortgage rate predictions, how the housing market could reignite, recession forecasts, and the “immaculate disinflation” that could save our economy.

In This Episode We Cover:

Why the Fed is keeping mortgage rates high even as we see lower inflation

Consumer spending and why Americans are being more “cautious” with their money

Credit tightening and risks for businesses if interest rates don’t decline

Why job openings are falling and what this means for unemployment

2024 recession risks and what would have to happen for a “soft landing” to actualize

And So Much More!

Links from the Show

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

The Fed’s Plan for Future Interest Rates

Can the Fed Dodge a Recession in 2023?

The Fed’s Next Move and When Rates Will Drop

Connect with Nick:

Nick's Twitter

Nick's Website

Nick on WSJ

Click here to listen to the full episode: https://www.biggerpockets.com/blog/on-the-market-139

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138: Home Building is Exploding, But Will it Solve Our Inventory Crisis? w/Nikolas Scoolis Sep 08, 2023

Show notes

We’re in the thick of a housing crisis. Buyers are waiting to pounce on properties, but there aren’t any houses to buy. Mortgage rates are high, and prices have risen or stayed flat in most parts of the country. So, where do first-time home buyers turn when there’s nowhere else to go? New construction homes! But it’s not just regular home buyers bidding on new construction. Investors are creating more competition as the existing home market slowly trickles out inventory.

Nikolas Scoolis’ team at Zonda has been distributing some of the most comprehensive new construction data for the 2023 housing market, and he’s got some good news to share. With new construction home sales sharply rising over the past year, builders are getting bullish, and home buyers are FINALLY getting their hands on some inventory. But, with so many home builders chasing luxury profits, are affordable houses even worth building? And while new homes bring some relief to the inventory crisis we’re facing, it may not be enough to balance supply and demand.

Nikolas will get into new construction market updates, why new home sales are exploding, who’s buying, and the BIG incentives builders are promising buyers.

In This Episode We Cover:

The housing inventory crisis and if new homes will match demand

Affordable housing and whether or not small square footage homes will come on the market

Baby boomer investors vs. first-time home buyers and the fight for inventory

Rate buydowns, free upgrades, and other incentives home builders are still offering

Recovering markets that are seeing strength return after HUGE price drops

And So Much More!

Links from the Show

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums