In this short clip, Patrick Bet-David, Adam Sosnick, Vincent Oshana and Tom Ellsworth react to the U.S. housing market losing $2.3 trillion in value.
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Housing market downturn wipes 2.3 Trillion dollars in value as experts Predict prices could still tumble Another 10 percent the total value U.S Homes has fallen a record high 47 Trillion dollars I'm sorry uh of there's No 42 a record high of 47 trillion in June Collective value to now 45.3 Trillion uh representing the largest June to December drop since the subprime Mortgage crisis in 08. though home Prices are up uh 1.5 percent over the Past year the median price has fallen About 11 and a half percent from a pica 433 in May 383 in January as higher Mortgage rates drive up borrowing costs And sideline potential home buyers last Week U.S home purchase applications fell To 28-year low that's a big number Tom 28 Euro to U.S Home applications huge 28 Is what that's a 1995 1990 1995 it's a long time ago 28 Year low Hardest risk area hardest hit areas Include regions adversely affected by Waves of Technology layoffs and Skyrocketing prices during the pandemic Include San Francisco Oakland New York San Fran is down seven percent Oakland Is down four and a half New York is down A point Pantheon macro ultimately Projects home prices will fall about 20 Percent from their Peak by the end of The year suggesting the median price
Could tumble another 10 to 346. go ahead Adam well I just I kind of want to throw This back to you because you've taken a Lot of heat for kind of calling this People would come up to me or to you and Say does Pat want real estate prices to Go down and I think that raise your hand If you've heard Pat talk about this on The podcast so raise your hand and You're in real estate and you still That's the real question yeah So every realtor is going to say no the Market's fine it's all good great time To buy it's like really uh You just bought a house a year and a Half ago yeah top of the market some Would say yep Um so what's been your strategy and and You're not anti-real estate you want the Market to go up you don't want to go Down but you're also a realist so what's Been sort of your outlook strategy of Why you've been you did a whole uh Wealth generational wealth real estate You've done a couple webinars on that What's been your mindset when it comes To real estate 15 years was the last Time we had a market crash that's a long Time 15 years oh wait we haven't had one For a long time we're overdue we've Never had a season where more fake money Has been pumped into the system like Today we have a lot of fake Equity we Have a lot of fake success we have a lot
Of fake Millionaires and too often fake Success or fake millionaires is just Like somebody winning the lotto you Don't have the identity of it so you're Overspending your over leverage you have So many different things that you're Paying on your concerned you're afraid When a buyer comes in like the other day We were looking at the property uh 6500 Federal it's down the street a block Away we went all looked at it they Bought this property in 08 for 13 and a Half million commercial real estate So we go look at the property beautiful Place 54 000 square feet uh you and I Went in there rob you and I kind of very Much so went in there and looked at Every single floor and we come up with a Suit the ladies like can I help you when I think I said yeah we're working with Management we're just checking on this Property to see everything good yes Everything good fantastic thank you so Much we're just looking around you know Uh uh the buyer is asking for eight and A half million dollars and he bought it At 13 and a half in 2008. okay this Doesn't mean it's happening Everyone by The way 2008 is not a peak oh six was Peak right 2008 Market tank 38 so again The people who have cash and made the Right choices and they're ready for this They're gonna Skyrocket and kill it and Make the kind of money they've never
Made before the people that had a lot of Fake success in the last few years and They kept spending money they're going To get exposed and they're going to get Destroyed and I don't think this is the End of think about it this way right now Who controls the most important knob Who controls okay Jerome Powell controls The most important knob what number is He trying to lower inflation to two Percent where are we at right now six And a half what is six point four six Point five percent what is the only Thing he can do to lower it right According to Tom he wants to go up to The attic and start banging out some Interest rates How many more times do you think he's Going to be increasing rates right well I I agree with what Adam says about Analysts because a lot of analysts you Know words are just words until they're Numbers I like to look at numbers and There's a lot of people from the real Estate I think he was calling you out Honestly publicly and I was offended by It and I would be upset if I were you I Don't like it but notice what's Happening Tom is starting to agree with Adam a little bit more weird so we'll do Something to maybe have a fight today For the audience that thinks we don't Like each other but they really don't Like each other
That's that's Mario where's Mario go Ahead Mario over here no no problem no Problem screw you very much anyway the Um The um So the numbers that I'm looking at that We see in what you're talking about real Estate here is is a couple things the Supply of homes is at the lowest that It's been in about it's it's more than That it's like 20 years the supply for Sale that's a real number the number of Buyers that are in the market is at a 28 Year low that's a real number and you Hear the real estate industry they make Their comments and everything and I kind Of look at it this way saying I don't Only ask the butcher whether the meat is Fresh right I confirm I want to confirm It so when you look at this and you look At where the FED is I think the fed's Got three more rate increases and that's An estimate but the estimate is coming Become we just had a really strong jobs Report and we've had some false Positives in certain earnings reports I Mean if you bought Tesla at early January you doubled your money in the Last 35 days right now it's settled at 200 but there's a lot of those things That are in the market Meanwhile it all comes back back and it Kind of hits kind of hard folks were Believing that the Fed was going to
Raise rates this year maybe two more Times quarter points well just a week to Two and a half weeks ago they threw a Quarter point at us and they're coming Back out on March 15th and March 15th is A date where they will also make Economic projections and make all those Numbers reports and everybody now is Looking at it and saying you know what I Think the fed's going to raise a half a Point and Powell is making comments like He's going to raise a half a point right Now the Fed rate is 4.75 a half Point That's 5.25 the so-called experts Goldman Sachs Morgan Stanley last November were saying well 5.25 is like The maximum we see and then it's going To be dropping down at the end of second Quarter we're right now with inflation Factual numbers certainly doesn't look Like it's going to drop and people Believe that on May 3rd and June 14th The fed's going to put another quarter Point based on what we're seeing in the Hot job market which means that the Interest straight is probably going to Hit five and three quarters not just Five and a quarter what does that mean For housing if it hits there that means The interest rates which right now they They popped up those have been real Estate we saw it pop up over the last Three weeks right in rates I think rates Right now I'm seeing some nods that if
You uh kind of a below average credit You're probably looking at seven and a Quarter right now Um having popped up on the 30 and the 15 Maybe six and a half And so those rates are going to be up Close to eight I don't like this news so People that have said things to Pat or Myself on Twitter oh you guys are bears You don't like the housing market no the Housing market is people it's us it's Citizens it's buying a house it's Getting into something and these are Facts here these numbers that are not Pointing to a rebound in housing in the First half of this year along with it Looks like Jerome Powell is going to Make three more trips to the attic to Visit the cheerleader bang what were you Saying about the butcher what was the Butcher analogy you said well I like to Say this is I don't just ask the butcher Whether the meat is fresh I also want to Confirm all right well there's a famous Quote from uh the philosopher Tommy Boy You guys ever seen this you said you can Get a good look at a T-bone steak by Sticking your head up a cow's ass but I'd rather take the butcher's word for It you know about this yeah 100 so I I What I do want to you guys don't know About that one shout out to Tommy weird Moment Right pounding up in the attic and Tommy
Boy what I do want to do is share a Story that that Um you know Pat will calls me up one day And I live in Miami and uh he's like What are you up to I'm like I'm just uh In Miami he's like come meet me at the Uh Hadid building remember that which is The by the way if you can put up the Hadith building it's a beautiful Building it's a woman's body Essentially building right that's kind Of like a thousand put a thousand Biscayne Miami It's a beautiful Village beautiful Building so there's overhead that looks Like a woman yeah there's The hell kind of girl are you talking to The artist who are you dating by the way The designer is a woman she died Gigi uh The Hadid family you know Bella hadiji Yeah this is their aunt uh she died While it was going on I actually lived At the building to the right of it and To the left of it so Pat goes I could Not afford to live in this building this Is like David Beckham lives there and uh Hedge fund guys it's like minimum uh I Want to say 10 million dollar entry We're trying to get there but he goes Hey uh come meet me at this building are You familiar with that I go yeah I lived Right next door for for 10 years so we Go there and we go to the penthouse Right sick unit
And it was listed at I want to say 40 Million dollars give or take And uh it was actually hilarious we're On a tour Mario's with us and the lady Comes to me and she says like so what Are you doing I go well you know I'm Here with my boyfriend Mario But he says it with a straight look on It good and uh meanwhile she goes to Mario and she's like so what are you and Your boyfriend looking for he's like I like to mess with Mario a little bit But Pat says so because no you got to Finish the story Mario's like who's my Boyfriend she's like well you and Adams That's not my boyfriend says you know What I really didn't see you guys Together I didn't see that though he was I would get a way hotter guy than Mario For sure but uh he is he is shout out to Mario getting married and uh having a Baby let's go Mario I mean amazing so We've we've got a brotherly love thing Going on so we go to this building it's A 40 million dollar unit if not more and Uh Pat has his realtor that that you Brought and the the unit had their Realtor and Pat says listen let me just Cut to the Chaser the subpat kind of Negotiates he says I'm gonna make an Offer they're like great he goes but It's gonna be very disrespectful She goes please don't don't do it don't
Disrespect me he's like it's going to be A disrespectful offer and it was listed For 40. I think they bought it for 30. I Want to say Pat says I'm going to offer Would you would you offer 13. 13. I thought it's a fair offer 13 Million cash 24 hours three Spitting your face disrespect They said no but I think they countered At what number 20 23 23 get up selling At 19. ended up selling at 19 did it Sell it sold four so here's my point We're talking about the market we're Talking about real estate here's a unit That was a ridiculous unit gorgeous he Even teased me with like what do you Think can you see yourself living here And I'm like Pat don't even play with me Right now so That's just an appointed example of These luxury markets that have majorly Taken a hit I mean even your situation With your car that I don't know if you Want to talk about that but some of These asset prices have been inflated And it's coming down to reality and I Think we should have bought that for 18. But by the way you because you would Have you would have taken care of you Would have been a house what a house What a generous house that are you on Right there's rumors out there that Women are doing more of the working and Men are staying at home I would gladly
Stay at home we have a by the way that Is a story we will cover him here in a Minute but uh uh no you're right here's The part that concerns me a car payment My dad uh wanted a car okay so I said my Dad's like just give me anything you Know my dad drives a uh for I don't know How many years he drove that 1979 diesel Until the day he said when this engine Dies I'm gonna die this is how strange My dad is the day the engine dies He thinks he's dying Yes or no babe he went to the hospital Two weeks they said sir you're okay says No the engine on my Mercedes died the Doctor's like that's a car you're a Human being he says but we're gonna die Same day no you're not sir you're still Living anyways so I said now let's just Buy you a car you know let's just buy You what kind of car do you want do you Want a you know do you want this car do You want no I just I just want a regular Car I just want a regular car finally Jen's like babe do you know what the car Payments are on a regular forty thousand Dollar car I said how much babe like I'm Thinking 500 bucks or whatever right no Babe 850 I said for what it says if you Want to lease a car or get a car today You know what's the first thing do you Know right now is the highest car Payment average car payment in the History of America you know what the
Number is it went up 200 bucks in a year So it went from like 540 to 770 in a Year Middle America's income hasn't gone Up 40 or 20 how the hell are people 700 Right there yep the average car payment In the history of America is the highest It's ever been and it's climbing so why Is it climbing car prices are now Climbing car prices used car prices are Coming down watch prices are coming down Collectible cards are coming down Bitcoin you know where it's at ethereum You know where it's at so luxuries in Every possible way are going down Because people buy not saying this is a Million dollar home people buy saying I Can afford a six thousand dollar a month Payment that million dollar home six Thousand dollar a month payment today is Eight thousand dollars seventy five Hundred dollars how do you come up with That additional fifteen hundred dollars If you didn't get the raise so what are People going to be doing with this it's Automatic you have to either desperately The people that bought a house that they Couldn't afford hoping they're gonna Make two three four hundred thousand Dollars of equity they're stuck right Now so imagine if these guys so right Now the only indicator that people uh Ought to be watching closing by the way Thank you for the reminder to go to our Sponsors here in a minute uh Adam you're
Wonderful yep yes sir uh here's the Biggest and indicator that concerns me Unemployment today is 3.4 percent okay It's a 60-year low unemployment is 3.4 60 or low when you think about Unemployment And interest rates being high Unemployment is low if they lower Interest rates unemployment is going to Go up if this 3.4 goes to 4.4 5.4 if We're at 5.4 people don't have income to Pay their car payment and their mortgage Payment and their bills what are they Going to do they're going to have to Start dumping what they have and they're Going to dump it for pennies on a dollar Because they don't have a choice so that Is my speculation of what's going to be Happening if this goes on 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 Foreign
