Transcript:
 
hey everybody landlords are growing very
concerned about what’s happening right
now in the property market and we’re
going to begin talking about rents how
rents have been declining and that’s
going to lead to actually bigger home
price declines in the very near future
in my opinion and after we get into all
the evidence and images today and graphs
and charts I think you’ll agree with me
so let’s go ahead and get into it please
like subscribe if you like what we talk
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Keep Us Alive here so thank you let’s go
ahead and get into it right now and
let’s go ahead and start right here this
is
apartmentlist.com apartmentlist.com and
this is the latest rent report and if
you look to the upper right hand section
here of the chart you’re going to see a
break in a trend that’s been happening
since uh well before 2017 this chart
only goes back what six years um it
includes the full year of 2017 actually
goes back almost seven years so let’s
take a look at the Trend and kind of
trace it here and if we look at each
year represented by the square here see
2017 I’m blacking a little bit but you
see in the middle of the year of course
during the summer that’s when rents are
the highest and they Peak then they go
down towards the fall and the end of the
year as students go back home for the
winter break and things like that more
people move in the summer as well and
then you see
2018 went higher than the previous year
2019 higher than the previous year now
2020 was an exception we know what
happened with the Health crisis rolling
out there but ever since then
skyrocketing rents 2021 2022 higher than
2021 but look what happened this year
2023 we did not surpass the high that we
saw in the summer of 2022 so we’re down
year-over-year for rents so this is a
break in the trend and if you take out
2020 which for obvious reasons was a
unusual year if you take out 2020 over
the past seven years it’s been higher
year-over-year rent every year so with
the exception of 2020 2023 was down
year-over-year lower than the summer
peak of
2022 and no Health crisis to put the
blame on so what’s happening well I
think it should be very clear to most
people if not everyone that the consumer
is getting closer and closer and closer
to being maxed out because of this cost
of living crisis and people are not able
to pay these high rents like they used
to be able to remember rents are a cash
game you’re not going to take out a loan
and pay rent uh it’s very uncommon that
that would happen so it has to do with
your month-to-month cash flow how much
you can afford each month to write that
check to the landlord and people are
just simply no longer able to pay these
enormous rents like they used to and
we’re going to talk about some other
stats here and numbers regarding the
rental market but this is where it could
begin because as rents go down more
homeowners that are reluctant to sell
renting is going to look like a more
attractive option if you can rent a
similar size property for half of what
you’re paying in mortgage uh and you can
sell your home and get out from under
the mortgage especially if you lose a
job especially if you’re getting behind
on your bills behind on your payments
because of something that everyone is
feeling right now this cost a living
crisis well renting is going to be a
bigger option so that’s going to make
more sellers want to sell and that’s
going to make inventory go up in the
housing market and that could also
balance out the housing market so you
see one affects the other low rents uh
could possibly lead to more people
wanting to sell their home and that’s
going to lead to lower home prices and
put pressure on home prices uh with the
higher inventory all right let’s get
into some other information here look at
this and we see what CBS is is reporting
rents are falling in major cities it
also goes on to talk about 24 Metro
areas where tenants are paying less than
last year and that goes right along with
that chart out of apartment list that
shows that this year’s Peak or highs in
rents the summer Peak was lower than the
summer of 2022 again the first time
that’s happened since 2020 but excluding
2020 we have to go all the way back
before 2017 before that happened now
let’s take a look at some other data
here so we can further underpin the fact
that the rental market is weakening
meaning the consumer is weakening now
let’s go ahead and take a look at the
year-over-year change in the National
Rent index and let’s go ahead and scroll
down a little bit here let me enlarge
that for you and if we look to the
bottom again we see 2020 negative rent
growth year of a year of course we know
why but this year we are negative year
over-year and compared to last summer
we’re down uh not a lot but compared to
the peak that we saw at one point we
were about 17 18% rent growth
year-over-year
uh compared to that now just about
negative 1.5g -2% year-over-year may not
seem like a lot compared to positive 17
or 18% that we saw uh 2021 and
2022 this is a huge change so at this
pace going from what 17 18% growth to
negative w we could see a swing next
year of 19 20% where rents Dro by 20% um
that’s what’s likely to happen if things
continue to soften in the rental market
the way that it’s looking here on these
charts now let’s go ahead and put more
facts and data behind this let’s look at
the vacancy rate we see a chart here
going back to uh the beginning of 2019
we see going into 2020 the vacancy rate
was between six and it got up to six
6.8% at one point before of course it
took a drastic nose dive and went down
to under
4% and of course we saw rents Spike and
Skyrocket with a lot of people had a lot
of extra money to spend and a lot of
people went out and rented places people
moved out of their parents house they
went to rent the place a lot of people
in their 20s and 30s that lived at home
went and rented a place but look at this
that trend has reversed and now we’re
almost to prepandemic levels or 2020
levels and this is going to continue to
climb as rent soften uh more people not
being able to afford rent afford their
own place moving back home with Mom and
Dad moving back into the basement moving
in with relatives getting roommates and
moving out of one place and shacking up
with several roommates all those things
that people do when they can’t afford
the rent uh themselves well that’s going
to continue to get worse why because of
the cost of living crisis is continuing
to get
worse and people are just not able to
keep up with this cost of living with
their wages so I think it’s going to get
a lot worse the vacancies are going to
increase and we’re going to see uh rents
soften and go down I think a lot more
especially in the next year middle of
next year 2024 that’s going to be the uh
major uh telling signal on where we’re
at and where we’re headed and it
actually would be much worse if there
wasn’t such a big backlog of evictions
in some cities people are having to wait
months and and landlords having to wait
months and months in some cases five six
seven eight months to evict their
tenants because of the huge backlog
imagine how much worse the vacancy Spike
would be if it weren’t for this huge
backlog with the the courts and these
eviction proceedings let’s take a look
at just a recent example here a recent
article here this is out of
K7 King County backlog means homeless
homeowner must wait five months to evict
deadbeat tenant that’s King County up in
Washington so this is an example how
long it’s taking five months this also
happens to be a story about a homeowner
that’s basically now homeless because he
can no longer afford his own place but
yet he can’t move into his home that he
had rented out because of the deadbeat
renter won’t leave it’s pretty insane
how uh renters and dead beats people
that don’t pay their rent have these
types of Rights so we see stories of
homeless homeowners right make it make
sense homeless homeowners but that’s
what’s happening in many places and this
is just one example so folks bulls and
bears please chime in on this am I
looking down the right path am I
projecting this correctly would it be a
lot worse if it were not so difficult to
evict tenants remember we had the
eviction protections and in most cities
across the US how much worse would it be
how much lower it would rents be if we
had the spike in vacancies right it
wouldn’t be pretty wouldn’t be pretty at
all you’d see a big spike in
homelessness and a lot of people
wouldn’t be happy to have to move back
in with relatives or Mom and Dad or
someone else roommates to help pay uh
the rent but if rents are dropping
that’s overall a good thing because that
makes it more affordable in the end and
then people may not have to shack up
with Mom and Dad or a bunch of Roommates
because rents would finally drop and
become affordable you see so the problem
eventually becomes the
solution does that make sense to
everybody right so this shouldn’t be
looked at as a negative thing this
should be looked at as possibly a
positive thing if we can uh have a
balanced Market rent need to come down
to where people can afford them and not
have five roommates and not have to move
in with Mom and Dad you get my point
here right so I’m I’m trying to think of
a way to word this that people can
understand in a simple phrase the
problem becomes the solution or I should
say what people perceive as the problem
that becomes the solution
unaffordability means more people can’t
afford it so then the demand should go
down but you have to have a free market
you can’t give people free rents and
allow squatters to sit somewhere for
five months or I’ve even read stories
about a year plus where homes were
occupied by squatters and because of
Protections in certain States and
certain city laws the landlord couldn’t
kick the people out because they had
these Protections in place uh even
before the U eviction protections from
2020 there were some cities that was
very difficult to evict dead beat and
non-paying
renters right and that creates an
unbalanced Market because if you can’t
get the people out then the home’s not
going to be on the market for rent so
that’s going to make less places
available for rent and that’s going to
make prices higher because you’ll have
less places to choose from and then
you’ll see bidding wars for people uh
competing to rent a home or an apartment
because there’s such a shortage you see
the problem here so again the problem is
the solution in the end uh but you’ve
got to let Natural Market forces take
place in order for the cost of living in
this case in order for rents to come
down and here’s where it I think gets
more interesting here forclosures
continue to Surge and they’re
questioning here are they a threat to
the housing market well the number is
not enormous yet but it is pretty big
compared to previous years now the last
few years have been ultra low
forclosures so it’s again it’s still not
a very large number yet but it is
beginning to increase and the uh the
rise in the foreclosures is also picking
up pace so what looks bad this year
could be even worse next year combine
that with falling run and more
homeowners incentivized to sell and rent
a place especially if rents go down
that’s going to be a more attractive
option and again that’s going to put uh
or take rather it’s going to take
pressure off of the demand for homes and
we may see uh more weakness in the
housing market right we’ll have to see
how it all plays out but that’s what I
see here uh kind of the trends that are
starting to happen in both the rental
and the real estate market all right
let’s move on here to some other news
but still staying on the topic of the
overall weakening economy and the really
weak us consumer but some um businesses
some financial institutions are trying
to make it seem like the opposite now
let’s take a look at what visa had to
say after their stock went up 2% on
earnings beat uh the car giant Visa says
consumers are resilient yes consumers
are
resilient uh what does that mean
consumers resilient well it means
consumers took on a lot more debt and
therefore they’re paying a lot more
interest to visa and other credit cards
but to visa to boost their earnings
right so uh people taking on debt and uh
being in very bad financial shape means
to Visa that means consumers are
resilient of course they are not going
to criticize the people that are making
them a lot of money by saying consumers
are weak right having to take debt
having to pay so much more in interest
because interest rates are higher and
balances are higher so giving Visa this
big uh boost in profits uh of course
Visa is going to say the opposite
they’re going to say the consumers are
great the consumers are resilient uh
they’re making us all this money right
would they say anything different all
right so let’s move on a little bit here
folks let’s talk about what Jamie
Diamond came out and said JP Morgan um
CEO he’s ripping central banks for being
quote 100% dead wrong on economic
forecasts well here’s the thing um Banks
love what the central banks have been
doing with all the money Printing and uh
basically the back stopping of the banks
no matter what so I think he’s putting
this out there to maybe appeal to the
more common working person and some
people may look at this and say oh look
at Diamond he’s great he’s criticizing
these big bad um central banks but uh in
the background uh Diamond loves what the
central banks have done which have
allowed his bank uh enormous enormous
profits and I’m not sure how many Yachts
he has but I’m sure he’s doing very very
well because of these uh these policies
from the fed and the central bank now
let’s also take a look at this here this
is out of the Washington Post and this
is higher interest rates and its effect
on the US’s debt we have to borrow the
money we have toor borrow the money that
we print and send everywhere uh us
payments on debt Spike to
$659
billion nearly doubling in two years how
much longer is this going to be
sustainable for before the debt just
goes uh you know straight up and down um
hyperbolic move and uh you know a lot of
people are saying when that happens it’s
just going to be uh
hyperinflation um so interesting we’re
seeing signs of deflation when we look
at housing and falling prices but yet
we’re seeing this this money printing
off the charts and stats like this $659
billion uh on the debt just an interest
and as we continue down the road here uh
we’re likely going to see more job
losses as consumer spending slows down
consumers are the largest part of the
economy with consumer spending being
nearly 70% of GDP or economic uh growth
uh so people are going to be chiming in
more and more and putting it out there
in how uh difficult of a time they may
be having and there’s actually something
trending on social media that we’ve been
reporting on here more often here
recently and it’s the hashtag silent
depression meaning things right now are
as bad or even some cases even even
worse than what we saw back in the Great
depression let’s take a listen here and
watch this clip on how one um Creator
broke it down here all right now please
take a look and listen to the
comparisons presented here most of these
we’ve talked about in pretty uh pretty
good depth here but take a listen we are
currently experiencing what I like to
refer to as a silent depression a period
that is arguably worse than the Great
Depression of the 1930s now to give you
an idea how bad it is today back then
the average American earned about
$4,800 annually which adjusted for
inflation today equals nearly
$85,000 now in contrast the current
average salary today is just
$556,000 now to give you an idea how bad
this is that is a
$29,000 difference that we should be
making today to be keeping up with
salaries during the Great Depression now
if you take the cost of fuel and adjust
it to the we have credit cards today we
didn’t have credit cards back then so of
course you don’t see as many people in
in food lines and you don’t see things
looking as bad as they were but when you
look at the numbers uh just look at the
salaries things are much worse let’s
continue to listen here with inflation
fuel cost should only be a173 right now
and if you do this on the average price
of a car average car prices should only
be $155,000 right now obviously guys
there is a massive Gap going on we are
currently experiencing what I like to
refer right everybody what do you think
about his analysis there and the numbers
how the adjusted for inflation income
should be about 85,000 but I believe
it’s close to 56,000 as he laid out
there um and is it going to get worse or
we’re going to start seeing some price
Corrections here uh that are going to
make actually the cost of living a
little bit easier to deal with easier to
handle right please me know what you
think down in comments uh please give us
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much everybody for watching keep
stacking as always bulls and bears peace
and we’ll see you next time here bull
boom bear bust bye
[Music]
 

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