Media says end of R.E. at hand....... is this the end????

Question

Everywhere a person turns today it seems to be a constant assault of some messaging about impending doom in Real Estate. From Youtubers too mainstream media, it's everywhere, sounding off of various frameworks of same messaging, that we should be afraid, the end is nigh...... Pick your version, reason, factoring.

Question is, why does the data and math speak a completely different story?

I am going to use my home market, Twin Cities, which is the 3rd largest economy in the entire Midwest, 2nd only to Chicago and Detroit, with projections of over-taking both in coming years to solidify #1 spot. While not a top 3 market in the entire U.S., it's up there, making what I believe a valid "read" of R.E. economy.    My data, sourced directly from MN Association of Realtors®.

To put things in full perspective, the below data will be in charts and graphs, with timeline going into '08' collapse era.

By the data and #'s, if I never heard a drip of media ever at all, and only ever read this, I'd have to say "wow, the economy/industry looks to be doing pretty darn good". So I am confused, where is the collapse? Where is the wobble? Days on market, RIGHT NOW, is at insane historical low's. Median Sales Price at historic high's, now today live time. Average sale price historic high. % of original list price above 100%, still. The 1 and only, and I do mean ONLY negative indicator is the Affordability Index which has been falling for more then a decade, has dropped off into nothing'ness.

I don't see collapse in the data. I don't see price drops as many talk about of 20-30%, nope. I see, at best, STAGFLATION (high price, low volume) indicators of potential BUT even then look at the sales volume over historical, it's still way up there.

So where is this doomsday the media keeps telling us we are in/entering????

Is the MN Twin Cities simply an anomaly? Is it the single GREATEST R.E. market in the entire U.S., holding strong while the rest of the country burns to the ground? is this a fish-bowl effect of data?

At same time, plenty can be found ranking Twin Cities as one of the best rental markets in U.S., too much data to list, pick your metric; countless cities ranked in best places to live in U.S. year after year decade after decade, rapidly ascending rents, diverse economy covering everything from bio-medical too mining, in-land sea port, one of fastest growing populations, higher median incomes on and on and on. So I don't see this as a "puddle" of a rental market either, again, major market there.

So, where's the collapse????.......

John Warren · Answer

@James Hamling we have had several listings here in Chicago that sold recently with multiple offers. The market isn't as hot as it was last year, but I also don't see pricing drops coming... there is no inventory so how can prices really drop? Demand is still going to be there to some extent, even if rates go up a bit.

The other thing no one is talking about is that rate hikes have already been baked in to some extent. I am now hearing that interest rates for mortgages may be somewhat stable for the rest of the year. Lenders baked in a lot of the upcoming hikes, and now there isn't anywhere for them to go. So all of that leads to prices not dropping.

Tyler Solomon · Answer

Wrote a post about this earlier today actually!

Taylor L. · Answer

If the Media could make accurate projections about the real estate market (or any other investment market) they would be making far more money doing that alone. Look up Inverse Cramer on Twitter.

Paul De Luca · Answer

@James Hamling

I agree with you. All of the statistics, data, and fundamentals I have seen do not indicate a market crash is coming anytime soon. I think many people are HOPING for that to happen though. But I think the majority of people that are hoping for a crash will not actually be able to take advantage of a crash.

The fact that a crash is so widely predicted is a contrarian indicator to me.

Nicholas L. · Answer

@James Hamling I totally agree.  It seems like the media, and clickbait Youtubers, want to portray single digit increases in markets that had 10 or 20 or 50 percent increases in the last few years as a "crash" somehow.  But like you I am at a loss at the coverage because it seems so incongruent with what is actually happening.  Here in Pittsburgh, for example, things have slowed a tad, and there's more inventory at the higher end, but good deals are still getting snapped up at prices that don't work for investors.  For high price point homes sellers may have to... reduce their list prices to what they would have been in 2019 or 2020.  CRASH!

Finally, here's a funny quote from an LA Times piece about Southern California real estate, where the median price FELL (gasp) by $10K... from a still unbelievable $760K... and still up >10% from last year:

"The region’s six-county median sale price was $750,000, down from $760,000 in May. However, a broader view shows that prices are still soaring compared with last June, when the median price was $679,000."

James Hamling · Answer

I agree on all points, especially with item that it seems a "majority" are calling out some kind of collapse. I say majority in quotes because does the majority actually think that, or is it just majority of media telling us to believe that? I know it's a bit down a tinfoil hat rabbit-hole, but what else can a person say, that is very literally the experience of things today, media feeding us thoughts that all reality of facts don't support.

It reminds me of the "good ole days" when we all knew Saddam had those WMD's and we had to get-em "or else". Remember CNN and all others putting up video graphs of what would happen if they set off one in Manhattan? And we ate it all up with shovels. I did.

James Hamling · Answer

I find it also very interesting the daily volume of posts on BP in various form asking/projecting some collapse, yet in this data-rich post not a single solitary post promoting collapse theory, refuting this data or explaining how this data is incorrect/ inaccurate/ not representative and there collapse theory is correct via the data of ______.  Not 1.......

The silence speaks volumes.

Steven Foster Wilson · Answer

I think that is why people have to get over the fear aspect. In the BP podcast #635 he talks about investors needing to get over the fear and acting fast. People will just keep waiting and wishing they would have jumped in when they saw a good deal but were afraid of a "crash." The only thing I have regretted was when I passed up a deal and did not try harder to make it work.

Eudith Vacio · Answer

@James Hamling your graphics in the Minnesota area is very representative of what is going on in Chicago. Based on the MLS data, here in Chicago our listings are down from a year ago, sales are down BUT prices are still continuing to increase. We definitely are seeing a slowdown in terms of listings but again with limited inventory and not many options, properties are still being snatched off the market relatively quickly. I don't see it. The only thing I can add is that for a short amount of time, I think sellers were fearful that their home wouldn't sell and it was easy to negotiate more in credits but again, still holding up pretty strong here!

Joe Hammel · Answer

The power of the media to control narratives is frustrating. It's all twisting information and data to sell views and control minds.

I'm with you. I think everyone around the nation is afraid to make moves because they are unsure of what's happening. Not knowing..this is currently THE opportunity they're waiting for.

The data is overwhelming. Metro Detroit is similar to what you're showing. It goes to show you how the "words" of the media are often times stronger than data.

With so many waiting on the sidelines and the data looking for good for the future of real estate, I'm trying to buy as much as I can right now.

I'll refinance later.

Media says end of R.E. at hand....... is this the end????

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