The Expert Podcast

…What does the future hold for property prices Housing affordability. And even the volume of homes available while this is a Canary in a coal mine right here. Home building permits are falling. And. The…national single family home building permits.

Are down 12.8%. Year over year. This is huge. Even at the rate before this decline in building permits there were 5 million. Home shortage.

From what is needed. To satisfy the demand of the market. As interest rates went up and as building prices went up and as availability of labor, Declined for building homes…

Construction of new homes especially spec houses…

plummeted…

What that's going to do is create even more of a shortage of homes. In the coming years, if there was already 5 million houses short. And. The population is going up…

Every duction. 12.8% reduction in building permits is only gonna make matters worse. In fact, in order to just to keep up with the demand. Home building permits probably had to go up 12.8% So it went down 12.8 You. add those two up That's like a 25%.

Reduction in the ketchup. Of new homes being constructed…

We predict. The by the end of this decade. By 2030. There will be 10 million houses short. Of what's needed to satisfy the market.

No matter how you slice it interest rates up home prices up. That's not going to allow for the house. Value average to crash. It's not, there may be some softening in certain markets over the next year or two. But in the long run unless construction.

Goes up dramatically. There's going to be a shortage of homes It may be that. Okay. a home living in a single family home. Is a rarity.

It's a luxury. It's only for certain types of people it's already getting to that point now…

This is a…

Kind of. Hidden secret…

Crisis waiting to happen…

It's a silent crisis. There's already…

Affordability problems It's all over the news…and people are talking about solutions and building houses, but the proof's in the pudding the numbers aren't there. There's not enough labor to build the houses And even if there was, there's not the. financial appetite for. Building companies developers. To build speculative homes.

And there's not enough people that are out there that are. Commissioning new homes being built Most people don't want to. Hire a builder to build a new house from scratch They want to move into a house that's already constructed, but builders don't want to build a house on speculation because they don't know if they're going to sell it They don't know if interest rates are going to go up more. Yeah housing prices are going to go up to where they can't afford it. Or if the market's still going to be there.

So contractors aren't really out there trying to build new spec homes. But most individuals aren't wanting to. Buy a piece of land and hire a builder because there's a couple of reasons. First of all, people want to move right away They don't want to wait a day. Second of all.

The financing and funding of that project is a lot more difficult. If you buy an existing single family home you've got a mortgage even though it might take a month or two to get through the underwriting process you can move into your house. Building a house requires a layered financing capitalization. You have to have a get a construction loan, converted to a permanent loan You don't know what the rates are going to be. Most people don't want to go through that hassle It's a lot harder to qualify for…

So. Building of a new home. Has a lot of obstacles where the builders don't want to build spec, the buyers don't want to build. contract…

Down to a 0.8%. It's going to go down even more. As interest rates stay where they're at and as the economy deteriorates. So whatever your position is in the. Construction industry If you're a builder, you're a an employee.

If you're a developer if you're a home buyer…

It might be good to make your plans based on the fact that there's still going to be a shortage of homes in the next two or three years. What plans those are. It's up to you. If you're a builder maybe you plan on cumulating some land that you can build houses on. If you're a home buyer maybe you work with a builder to build you a house from scratch.

If you are. An employee, maybe you figure out a way to kind of get the maximum amount per hour. Look we have some colleagues that are construction companies that pay 80 $90 an hour. For reliable qualified help…

You can't make that money if you don't show up and you're not good at your job. But I can guarantee you if you're very very good at. Simple things like framing. Roofing. even slight project management.

You know you can be six figures. You could work yourself into a $200,000 job easily. So you can consider that as well. What if you're a supplier. Same thing.

The building is down Your volume might be down So you might have to make it up on margin…

Put some comments below let us know what you think. And plan according.