In this short clip, Patrick Bet-David, Jedediah Bila, Tom Ellsworth and Vincent Oshana talk about home prices reaching the lowest level in over a decade.
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Home prices in March posted biggest Annual decline in 11 years biggest Annual decline in 11 years It fell 2.4 percent in March to an Annual rate of 4.4 million uh marking The 13th time in 14 months that sales Have declined according to National Association of Realtors the March drop Follows February's surprise rise of 13 And three quarters from the previous Month to slow down in the housing market Is now affecting prices which fell point Nine percent year on year to median Existing home price of 375 000 folks There's nothing in Florida south Florida At 375 this is places like Toledo but The housing market is slowing down due To a rise of mortgage rates high home Prices and low inventory levels housing Starts which measure uh U.S Home Building fell 0.8 percent in March from February according to a Commerce Department the number of new listings in March fell 20 year over year while the Inventory of home sales is one percent Higher than in February and up 5.4 Percent year over year the cooling Housing market is caused by a cooling Economy the prospect of a recession Within the year the high inflation which Is being fueled by housing cost uh Prices Tom while I'm reading this story What you know Powell is getting ready to Potentially do something with the rates
What do you know about what he's going To do is he going to raise rates we're Hearing mixed stories from a lot of Different people what do you expecting To happen well Um if Kai will get the T-shirt up for Sale we have the 2028. it says fight Inflation save the cheerleader it's Um it's it's up there somewhere Kyle you Got to get it into the storefront on Value what else Tom go ahead keep going So here's what's happening Powell is Coming up I believe in the next he's Heading up the stairs right now because The FED is meeting right now and there's Going to be announcements in the next 24 Hours and then also a jobs report by uh Friday Cinco de Mayo Um in which we're going to hear I think A quarter point increase and then but We're also going to hear him say that we Believe we've turned the corner on Things and so there may not be further Increases in June and in July and maybe When we get toward the end of the year Probably November time frame maybe we Can see the First Rate decrease so that Is what interest rates are looking like Right now that maybe were Um right there on the edge of it now What does all this stuff mean on the Home prices well that means that Interest rates are still high People are reluctant to put their homes
On the market right now there's only 980 000 listings available in these United States nine hundred eighty thousand that Is the lowest it's been in years and That's resulting in what it says is home Sales have fallen to an average of 4.4 Million a year there's about a hundred Million sellable homes in America so They're saying only about 4.4 million of Those will trade hands in a strong year It's usually about 10 million trade Hands like 1 in 10. so what do we have Right now People that have put their houses on the Market the price is still high and They're reluctant to drop it because no Buyers are approaching so there's no Reason to drop it no other houses are on The market there's no competition on Their block there's no reason to drop The price so low inventory gives Consumers few choices and prices aren't Dropping and even if they could afford It the interest rates on the mortgages Are too high meaning very few Transactions happen and that's what You're they were talking about here is U.S home sales fell that's not home Prices folks that's a number of Transactions so your friend who's a Realtor Less work your friend who's a mortgage Broker less work working for a title Company anybody that's in real estate
Has got less work and having a tough Time but there's no recession here but There's no recession no they changed the Definition in real time remember that so That that's what's going on Pat but We're going to see I think uh Jerome Powell is going to be you know Walking back down those stairs out of Breath on Wednesday afternoon after uh Giving the cheerleader one more shot and Uh Tom do you think even even with all The stuff that's going on and his lack Of concern for the cheerleader and With the numbers that they're seeing Silicon Valley bank and then you know First Republic how many people think are Calling him saying dude what are you Doing the more you raise the rates There's more Banks we can't afford it Like how many people think are trying to Get that message across to him of course We know who's not making that call who Isn't making that call Jamie Diamond I'm Making a call Jamie Diamond is making a Call and saying hey Jerome listen if you Want to raise the rates even more go for It I will totally support you I Understand it's not fair what's wrong It's Jamie maybe it's a precaution take A half point this time just as a Precaution right but but he knows you Know you know who wins the more he Increases the rates the big Banks the More he increases the rates the more big
Banks win the less he increases the Rates the less smaller Banks win so is Do you think people are making that call Do you think the White House is making The calls do you think the the chairman And CEOs of banks are calling and saying Hey can you relate this message to Powell or I think none of that is taking Place right now I think everybody is Calling there's about uh there's a group Of Board of Governors for the FED that I'll vote on this but Jay Powell is the Leader and I think you're correct Everyone is calling him and I think it's Going to be a good Cinco de Mayo for one Part and this is what what I mean by it I think the jobs report is not going to Be catastrophic but these layoffs are Going to be very real but I think jpeg Towel is going to come out and say this Quarter point and I think we're at a Moderation of inflation I think maybe we Have turned the corner a a a Prudence of Uh of a flat policy over the summer if He says phrases like that everybody's Going to say oh the worst is over and You're going to see a stock rally this Week I believe and that ends on Cinco de Mayo but on Main Street it isn't Cinco De Mayo yet on Main Street it's still Layoffs housing as we've talked about And yeah Pat I think there's many Sectors that are out there that wish Look if he wants to if he wants to
Really okay we'll use another word here If he really wants to Goose the economy Um then all he does is he drops things Two points tomorrow morning and makes Cheap money out he won't do it he should He's not but I don't think that's the Right move I think history is going to Be kind to Jay Powell that he was able To tame inflation without cataclysmic Unemployment but I think there is going To be a bit of a recession people are Saying 89 chance you got the Wall Street Bankers today 86 chance on a wide survey of Wall Street uh bankers and analysts saying We're going to have a recession probably Q4 q1 is what people are are now Pointing to that's all part of getting Through the inflation and getting back Through so here's what here's what Berkshire's Charlie Munger just said he Issued warning for U.S commercial Property uh uh Charlie mcgregates issued A warning about the U.S commercial Property Market saying that the banks Are full of bad loans as property prices Fall Monger noted that Banks were Already pulling back from lending to Commercial developers and that there are A lot of trouble Office Buildings and Shopping centers saying there's a lot of Agony out there Munger also said that The Berkshire Hathaway had supported Troubled U.S banks in the past and that
It is not that damn easy to run a bank Intelligently there are a lot of Temptations to do the wrong thing which A lot of people have done that there's a 300 million dollar building story that Was going out there in San Francisco if You can pull up the picture here uh it's A fire sale 300 million dollar building In San Francisco office tower mostly Empty open to offer offers But look at that this is on California Street and you've been to San Francisco Location yep if you can get past the Needles and the feces it's on California Street and Um the Lobby's beautiful but just Outside the lobby there's a little bit Of a funk little smell but uh if you get Past that this is actually a great Building in what has been historically a Great Um uh commercial address this was worth 300 million dollars in 2019 it's a 22-story building and is expected to Sell 60 million dollars guys from 300 Million dollars this is this is Wall Street Journal story is expected to sell For 60 million bucks cream of the crop San Francisco do you know what they're Expecting anywhere between one and a Half trillion dollars to three trillion Dollars high low of defaults in Commercial real estate because they're About to be called with the new rates
They're not going to be able to make a Lot of these payments so a Class A and Right now the biggest building in Fort Lauderdale I want to look at it this Week to see if there there's any Interest that one could buy it's the Biggest building in Fort Lauderdale how Many square feet is it we looked at it It's a 400 000 square feet yeah it's It's Mammoth we're talking we're talking Multiple partner companies we could have In there we're talking campus it's huge It's it's massive 400 000 square foot Building you've seen this building it's Off of federal okay and you know who's Renting nowadays commercial real estate Class A businesses are not running those Types of offices today it's a very a lot Of things has happened to commercial Real estate the last three days if There's any sector of the market Specifically real estate that got hit Because of covet it's commercial real Estate you know what is doing well in Commercial real estate industrial Buildings because industrial they need Spaces to go under do manufacturing do All this other stuff but when it comes Down to the high rises this is going to Be just the beginning guys with cash in The next six 12 24 months are gonna have Some very very weird opportunities to Buy buildings there's going to be so Many auctions going on right now if you
Got cash you could pick up some real Nice properties today specifically in Commercial real estate and I I think When you look around you sometimes you Can't see what's happening in businesses But let me tell you this is a strong Economy overall this is the United States we're not going away and we're Still the reserve currency but I'll I'll Use value payment maybe as like a little Case study people can't see what we're Doing I mean this what we're building The company we're building here and what We're looking for in terms of space We've tremendous we're running these Conferences we got the conference team We got the ad team we've got the media Team decentralized media is here and That is the Bedrock of what we're Growing your podcast is here Jedediah There are so many things that are going On so when you hear this there are Companies like us from this world we're Doing in media looking for huge Opportunities and we're about to find Huge opportunities because the Property's on sale to go do the kind of Things that we're already doing and Already in position to do so if you like This clip and you want to watch another One click right here and if you want to Watch the entire podcast click right Here [Music]
