436: Home Prices are Falling. Will it Continue?
I get political today. But first, I discuss jobs. How far will home prices fall? Innovation creates jobs. It does not destroy jobs. American innovation is one reason that we added over a half million new jobs just last month. All this new job growth and a robust GDP reading will keep us out of a recession for the next few months, maybe much longer. Both the US median home price (Case-Shiller) and inflation peaked last June. The US median home price fell 2.5% from its peak. Where are they falling? Where are the rising? We explore experts’ outlook for home prices. Five expert opinions all range from 2023 home prices rising 5% to falling 4%. Volatile, coastal markets are correcting down a little. Many stable markets in the Midwest and South are stable or rising a little. Beware of those that say, “It’s never been a better time to buy real estate.” That’s wrong. 2012 was better. 2021 was the worst time to buy real estate recently. Even these past few years, and today, it’s hard to find a better place to put your investment dollar than carefully-bought income property. This won’t last long. At GREmarketplace.com now, providers are often giving buyers 2% of the purchase price as cash at the closing table and free Property Management for two years. Resources mentioned: Show Notes: www.GetRichEducation.com/436 Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE or e-mail: info@RidgeLendingGroup.com Memphis property that cash flows from Day 1: www.MidSouthHomeBuyers.com Find cash-flowing Jacksonville property at: www.JWB I’d be grateful if you search “how to leave an Apple Podcasts review” and do this for the show. Top Properties & Providers: GREmarketplace.com Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free—text ‘GRE’ to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold Welcome to GRE! From ANNapolis, MD to Santa ANA, CA and across 188 nations worldwide. I’m Keith Weinhold, Forbes REC member and founder of this very platform here… and this is Episode 436 of the Get Rich Education audio podcast. If you’d like to watch me on video, check out the Get Rich Education YouTube Channel. But our audio show, right here, is our most popular platform. Is the world trying to tell me that my voice is better than my face, then? That’s what I’m starting to think. Ha! ARE American home prices are falling. How bad is it? When did it start? And when will it stop? I’m going to answer all of that in just a bit. Last week, I mentioned that a strong GDP report has told so many permabears and gloomer-and-doomers that they were wrong about being in a recession by now. And gosh… the latest Jobs Report came in after that and it just added insult to injury for all these permabears - meaning those that are permanently bearish - permanently making dire predictions about the economy & housing. And, even if you’re listening to this show years from now, this is how you know that a recession is NOT at all imminent. The whopping 517,000 new jobs added last month nearly tripled expectations. Still... I wonder if constant rumors about a coming recession will drag on longer than the fake meat fad. These recession rumors keep getting stirred up. Now, when it comes to jobs. You care about that a lot as a REI. You need your tenant to have a job in order to pay you the rent. The number of American jobs saw their recent low in 2020. In fact, they fell into a deep trough - a BIG dip back then. That was the pandemic shutdown. People had to stay home. The government paid workers to stay home. Maybe you were paid to say home then - about three years ago. Well, that means that a lot of goods weren't being produced in 2020. Many services weren’t being produced either. Well, when MORE stimulus-fueled dollars began chasing FEWER goods, that's exactly what began stoking the inflation fire for the next few years, right up to & including now. That’s where the monetary inflation came from. That’s why I’ve regularly been paying $8 for a bottle of good quality salad dressing. Aren’t you doing some of these things? Yeah! Hey, what’s wrong with you? In today’s polite society, you aren’t adding a 25% tip for your $6 bottle water? No, I hope you’re not. I’m not doing THAT yet. Ha! Well, that was when jobs cratered, in 2020. By today, with all of these American jobs roaring back, total jobs are now 2.7 million above pre-pandemic levels. There's now just a 3.4% unemployment rate. That is just really hard for the doom-and-gloomers to deal with. That’s the GOOD news. Though more jobs are good news, it's not all good. The bad news here is that strong employment means more inflationary pressure. To that point, Jerome Powell recently said that Americans should expect a couple more interest rate hikes to keep combating inflation. Not everything is all good in the good ol’ USA. I mentioned some of the economy’s other problems last week. But what's the reason for all this job creation? Why is this happening in America? In a word, it is American innovation. Innovation creates jobs. Now, there might have been one point in your life when you thought that innovation DESTROYS jobs - like, for example, with the fact that today’s bank tellers and grocery store cashiers are disappearing. Innovation does not destroy jobs. Innovation creates jobs. We’ll like at why shortly. But first, the Global Innovation Index was released and it shows that America is the 2nd-most innovative nation in the entire world. Yep, of 193 UN-recognized world nations, the US is only second to Switzerland. People have falsely believed that innovation destroys jobs since before the tractor replaced horses and mules. Yep, last century, one new tractor replaced five horses or five mules and that meant that it soon took fewer farmers to feed the animals, because fewer animals were needed. For the ultimate result & outcome, look no further than where you are today. We are more technologically advanced than at any time in human history. The result is that we have 11 million more jobs than available workers. It’s kind of the opposite of unemployment. Innovation is what got us here. Twenty years ago, no one could have foreseen ALL of today's new job opportunities as a: drone operator, quantum machine learning analyst, YouTube creator, a podcaster, social media director, app developer, information security analyst. New jobs that didn’t exist before, like a digital marketer, TikToker, metaverse wearables developer, and on and on. Well, that right there is evidence that in twenty years, it’s hard to foresee what new jobs WILL exist that don’t exist today. But they WILL be created. Even eBay, which some regard as a “digital yard sale” company - though they’re more than that. But eBay just announced new hires for Web3 and NFTs—those fields barely existed two years ago. In a few years, when self-driving cars replace Uber drivers, those driver jobs will simply migrate to better-and-higher uses, just like it did for jobs of a bygone era like telephone switch operators & travel agents & bowling pin boys & and elevator lift attendants. But people will still fear for the "loss of jobs". Don’t fear for a loss of jobs. Fear for a loss in innovation. American innovation drives all this job growth. So the fact that we aren’t having a recession anytime soon is really frustrating for all the permabears.
I wouldn’t totally count it out that we could have a mild recession LATER this year. But not soon. Politics is another sad reason that people create gloom & doom-type of media. Some people wanted to WISH a recession into existence since last year, especially leading up to last year’s mid-term elections because they wanted to sow seeds of fear because they didn’t like the political party in power. People think that if they can just convince enough people that there’s a recession, then they can topple the current administration. Then if that incumbent administration gets toppled and THEIR people are now in power, even if it doesn’t change anything in the economy, that same recession-promoter will stop promoting a recession because they got their political wish. It’s politically-driven. I don’t do that here. I don’t do left-right politics. Instead, I do up-down. Up is integrity. Let’s go up. I first heard that up-down framework from Dr. Chris Martenson - someone I really respect. We had him on the show a couple times here. How do you do up-down instead of left-right? Follow people that you disagree with on social media for some new perspectives. Trying watching some YT channels that you don’t agree with. Even delete your YT history & start over if that does the trick. Today’s suggested video and social feeds can often keep people in one narrow “think” silo. So two big reasons that crash bros have been wrong are discounting American innovation and being blinded by politics. OK. Well