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How The Housing Crash Will Happen



#Crash #economics #real estate market crash #real estate bubble #Education
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How The Housing Crash Will Happen - (Step by Step!)
The 7 Stages, Stage 1: Speculation = drives prices up (prices families out) REITs gain ground
Stage 2: Low interest rates = Equity Release, housing becomes leveraged investment for further investment release
Stage 3: People live beyond means = Over optimistic GDP (Fake GDP)
Stage 4: Problem occurs (2008: ARM aka Subprime crisis / 2020 Virus) = Spending stops
Stage 5: High Unemployment = Start of Recessionary Cycle, mortgage & rent payments missed… unemployment scarring. Wage reductions.
Stage 6: Quantitative Easing….
Stage 7: CRASH!
Stage 7: Brand NEW BONUS Stage! Mortgage forbearance
Stage 7: People can’t afford to pay their mortgages when forbearance runs out = House prices reduced to reflect supply & demand
Between 2000 and 2005 the value of homes across the USA grew by over 50%!
By 2005, 40% of all home purchases were investments or second homes.
And this is Stage 1: When a house no longer becomes a home. Speculation from investors and REITs drives house prices up and stops families from being able to afford a safe place to live in that community… Because investors and REITs only buy the best houses in the best neighborhoods prices skyrocket as a result
The idea or the dream that was sold to people was that in 2 years time, they could refinance and get another great interest rate (& release even more money out of their house or houses)..
The con was that you could buy as many houses as you liked and just keep using them as your cash cow by refinancing..
This was of course a lie. (And this is where Stage 2 begins)
The brokers got rich by selling mortgages to just about anyone
The banks then got rich by packaging up these mortgages and selling them as CDOs
Stage 3 was of course people living beyond their means and creating a bubble GDP.
Some studies suggest that 50% of the GDP was a direct result of the housing market alone... that's crazy!.
Stage 4 Crisis mode! In the 2008 recession this was caused by the shadow banking sector & Arse holes on Wall Street..
In this 2020 recession, the crisis has been caused by a virus..
The price of housing is primarily affected by two main points: the first is unemployment, because if unemployment is high, then people can’t afford to buy houses, or more specifically, the monthly payment for a mortgage.
And the second point is interest rates, the higher the interest rate, the less house people can afford to buy with their monthly payment..
The lower the interest rate, pretty much anybody can get in on the housing market, assuming that the down payment and credit score is not too high, and they have enough of a monthly income through a job to make the payments
The average down payment has just gone up, the credit score requirement has also gone up, and the unemployment rate has also gone up! If these aren't warning bells, I don't know what are
There is also one other point I need to address which is inventory levels, however I'm just going to call this supply and demand..
Too many houses on the market, and prices go down. Too few houses on the market, and prices go up..
And guess where we are right now? We have too few houses on the market, meaning that prices are being held up by the lack of inventory..
Stage 5 then is high unemployment. Signalling the Start of the ‘Recessionary Cycle’.
Despite the Fed's best efforts, unemployment remained high for years throughout the 2008 crisis, and I expect it to do so again during this crisis.
Stage 6 - The Central Bank to the rescue!.
During the 2008 crisis, the Fed's main tactics or weapons of choice were as follows.
1. Interest rate cuts
2. Targeted assistance to ailing financial institutions, in other words: Bail outs...
3. Quantitative easing
Stage 7 - then should be the final stage, this is where the crash happens! And this is where we should be right now..
But the Fed created a new bonus round! The bonus round is called mortgage forbearance, which we’ll call Stage 7 - Part A
Stage 7 (B): This is where mortgage forbearance, which is still at an all time high of 9%, finally runs out, and people can’t afford to pay their mortgages, meaning that houses either go back to the bank or owners opt to sell them on the open market and cash out what little equity they can.
These are the 3 points that are holding up the housing market right now, 1. Mortgage forbearance
2. Historically low interest rates.
3. A lack of inventory
DISCLAIMER
This video is for entertainment purposes ONLY..
I am not a financial advisor or attorney. These videos shall not be construed as tax, legal or financial advice and may be outdated or inaccurate; all decisions made as a result of viewing are yours alone.

#news #real estate pricing #housing data #real estate investing #mortgage debt #crisis #tenants not paying #housing market predictions #property investment #mortgage crisis #mortgage news #real estate #investing #finance #housing bubble #economy #neil mccoy-ward #will the housing market crash #debt #2020 recession #foreclosure #mortgage collapse #housing market #economic collapse #real estate crash 2020 #mortgage updates

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Pure Gold, i agree with you on all the points!

by Dario D'aversa 4 months ago

Who needs terrorists when we have banks and politicians screwing over their citizens

by Larry Vang 1 month ago

People need to learn to live within their means. I foucsed on overpaying my mortgage for the past 10 years and have very little debt left (I am 33 years old). I do not want to owe the banks anything. Budgeting and being careful with money should be taught at school.

by NATASHA hawa 1 month ago

Thee Lynn:
Thank you for inquiring. I have had 100% occupancy for years. I have rented to one family for 19 years and now I rent another property to the son of this tenant. I have known him since he was 5 years old. At the beginning of the pandemic I had one tenant who was short by $400.00 and caught up the following month. This month I had another tenant who was short $600. I believe she will catch up with September rent. If not, I will divide it out over the next year. These tenants have rented from me for several years and are good people who are victims of these circumstances. Since I have no mortgages, I have no trouble with helping them out.

by Dr-Energy 2 months ago

I paid off my mortgage today, as a matter of fact! No debt whatsoever. I have land, a garden, and getting chickens soon. In Hawaii, so fruit and fish are plentiful. People are bartering more than ever. Inflation and jacked up taxes are my worry, but living as the matriarch of three generations under one roof, all adults, with various skills, makes us strong. Now, if only I can dodge COVID.

by Merry Walsh 3 months ago

“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
Thomas Jefferson

by Mike H 2 months ago

All these politicians that told everybody to stay home they've been getting paid since day one they don't really care if people are going to start committing suicide or go homeless or turn to drugs and alcohol because they can't get a job or they can't go to work and there's so far behind in all of their payments that there's no way they're ever going to catch up I say shame on every single politician that is accepting their paycheck and worrying about whether or not they're going on vacation what the hell is that b*****

by Peter Gottschalk 2 months ago

I'm a millennial. I'm heartbroken I didn't live during the 60s and 70s. This isn't America anymore, this is some dystopic nightmare. I understand why Boomers are so patriotic, I would be too if I didn't grow up in the era of neoliberalism.

by Kyle Archer 2 months ago

I have been a small investment property investor for 30 years. Properties 12 and mortgage free. I keep my rents just below market and keep good tenants. My advice to future investment property investors is to take advantage of any market dips and purchase your first rental property. Keep it maintained and deal honestly with your tenants. This strategy provides me with a good retirement income.

by Dr-Energy 2 months ago

Warren buffet recently sold his stock in US Banks and bought stake in a gold mining company. Another clue to the puzzle

by Ninja Dude718 2 months ago

Housin market is waaaayyyy over priced. There needs to be a correction.

by T Bone 1 month ago

Paid off mortgage moving to 40 Acres going to have a garden & Chickens

by Joan Green 1 month ago

My home is temporal, Jesus said in scripture that he is preparing a place for me in Heaven. Accept Jesus today, take him from your head belief and accept into your heart. This world will not get better get prepared. Read John 3:1-16

by 73 Winny 1 month ago

great video bravo... man has a brain!

by ellaskins 3 months ago

Banking is FRAUD, always has been.
Legalized illegalities.

by JonBernard41 2 months ago

All the great Empires fell China fell Britain fell Rome fell and America is going to fall it's it has to do with the fact that luxury and power breed weakness and stupidity

by x omega 2 months ago

As a 20 year Real Estate Appraiser I would say you are speaking the truth people don't want to hear.

by Roslyn Schlenker 2 months ago

If theres one universal rule its this:
Whatever you prepare for, will not be what happens.

by jp1234554321 2 months ago

I have long expected a massive collapse of the US economy. Seems like 2020 is the year it begins.
Years ago I decided to live simply. My house is paid off, my property has vegeteble gardens, fruit trees and bee hives. I also raise rabbits and the garden is most of their feed.
I am capable of self sufficiency. It feels good.

by Peter Johnson 3 months ago

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