[Music]
welcome back to real estate mindset
today's video is going to be absolutely
Bonkers and the data is in and what I'm
going to show you guys is the new home
sales in Texas and exactly how bad
things really are out here in Texas now
I understand a lot of people don't
understand that and that is why I really
love doing these field videos so if you
guys can't do me a favor one thing I
understand I'm not a financial advisor
understand also that I'm trying to get
you boots on the ground data this is my
personal YouTube channel and I do have
permission to film on location and no
that was not my drone work so I do not
need a license to do that so what I want
to do is show you the community that I
actually drove to right now which is a
master plan Community called travola so
if I zoom in here on the map you can see
the master plan community of Tavola and
the Really astonishing thing if you look
here is there's really not that many
homes that are listed on the market
which is especially crazy because right
now there's a couple 400 homes being
built that the general public can't see
so I'm going to take you guys through
some behind the scenes stuff here and
we're going to talk about price Cuts
we're going to talk about inventory but
where we're going to start right now is
I'm going to start by talking about new
construction where I'm going to take you
guys to to do that is I'm going to take
you to a block around here where the
entire block is actually under
construction and essentially none of it
is listed on MLS okay so where we're
going to start this little Adventure is
with hidden inventory or existing homes
that are under construction and I think
it's especially important for me to
start the video here because all of this
existing inventory and this hidden
inventory and the inventory under
construction is just going to magnify
all of the things that we continue to
talk about because all of this stuff
that you guys can see in the background
and all of this is being built right
here
you guys that's not even on MLS yet so
the fact that's not even an MLs yet
again it's going to magnify additional
price drops it's going to magnify the
increase of inventory this is absolutely
shocking not a single home that you guys
can see and I'm actually walking down
the street right now that the entire
block the entire Street each one of
these houses is under construction
different levels of construction and not
a single one of these houses that I've
been able to find anyways is currently
listed on MLS so all of this inventory
is just sitting here off of the market
so the real numbers you guys are a lot
worse than what they appear now I also
understand that I am in Texas and Texas
is the state with the number one new
construction going on I mean you guys
can see look at all this new
construction
isn't it shocking
right but I understand that Texas is
special so real quick let me pull up the
Fred economic data chart just to show
you guys how much new construction is
going on on a nationwide average so as
you guys can see here there's over
1.7 million homes right now that are
actively under construction and that is
a historical High there has never been
this much new construction going on in
the housing market so again and you guys
could probably realize that because look
at where I'm at none of this is on MLS
no one owns these houses right now I
mean this is total construction this is
all hidden inventory this is all off
Market let me pan so you guys can see
what's ahead of me
I mean it just keeps going down
and again
the real problem and really what I'm
saying here is the real problem hasn't
really even surfaced itself yet in
mainstream media as soon as people start
understanding the gravity of how much
inventory is in new construction
especially in States like Texas I think
panic mode is going to hit because what
are they going to do with these houses
they can't again they can't even sell
this to institutional investors now what
I believe is going to happen is as a
result of all of this hidden inventory
it's just gonna to it's just gonna allow
buyers and investors to get better deals
as we move into 2023 so as we continue
to wait and allow all of this inventory
to get on the market a lot more will
become aware to normal people and again
once the cat's out of the bag completely
and that's why again I'm taking you here
you guys can see this you can't find
this on MLS you guys you can't see this
on MLS I'm taking you here none of this
is reporting this is all off of Market
this is all hidden inventory this is
really going on you guys right now at
least in Texas so I know really anywhere
right now that there's new construction
you know it's almost all similar to this
I mean just overwhelming amount I've hit
an inventory so now let's go on to the
next part of this video and let's talk
more about the price cuts and remember
the reason why I started with hidden
inventory is all of this inventory as it
comes onto the market it's just going to
magnify the buying incentives and the
price Cuts I mean it's going to be
absolutely great guys so stay tuned
let's move on to price Cuts now let's go
over now price Cuts now obviously we're
seeing price cuts across the board and
where I wanted to do this scene is
basically right behind me you can see
that Lennar Office right there which is
basically tucked in to the neighborhood
right behind me that we're coming from I
mean all behind me you guys that's where
I'm showing you guys all of the Hidden
inventory that's what I'm about to show
you what existing inventory that they do
you have but right now I want to talk to
you guys about the price drops now
basically every builder in this
community of travola is cutting the
prices anywhere from 10 to 15 percent
which is absolutely astonishing
considering we're only in January of
2023 and just to remind you of how big
the price cuts are let me pull up the
Lennar website right now now as you guys
can see in the community that I'm in
right now there's price cuts of sixty
seven thousand sixty seven thousand
sixty thousand and eighty six thousand
dollars off of the price that's off of
the price but not only are we having
those price cuts when I went into those
sales offices they're also doing
additional buying incentives on top of
those price Cuts so they're basically
throwing everything they can right now
at buyers to come into their sales
offices to start buying these houses and
the astonishing thing is is there's
about 200 homes right now from Lennar
that are under construction and they
can't even get institutional investors
to buy right now in Bowl milk for 15 to
20 percent off so think about that they
can't even get new cons they can't even
get institutional investors to buy their
products so naturally as a result of the
inventory that I'm about to show you and
all of the Hidden inventory as we move
into 2023 especially in States like
Texas and Metro Areas with heavy amounts
of new construction I believe there's
going to be an absolute bloodbath in the
new construction industry I believe
what's going to happen is buying
incentive Wars between Builders I think
they're going to go back and forth
trying to sell their houses cutting
prices offering incentives and
eventually and I'm already starting to
see this all of those price cuts and
buying incentives are going to fall back
into the resale market and when the
resale Market needs to compete with
these new construction Builders the
resale Market will also lower their
prices that's going to create an
additional price cut war between these
sellers these price cuts are absolutely
shocking but again you guys it's not
just price cuts the price cuts are a
really big deal but the buying
incentives right now are absolutely
spectacular in Texas this is absolutely
a wonderful so now what I'm going to do
is show you why we're having price cuts
to begin with by showing you what
inventory they have right now so now
what we're going to talk about is
existing inventory and really about how
unbalanced new construction is with
existing inventory and what I'm doing
right now is basically walking down a
block of homes pretty much predominantly
built by Perry Homes and lot and not
Lennar and I thought this would be
really cool to capture because
essentially there's building going on
within a already completed home so a lot
of these homes that you guys see behind
me now obviously that one's under
construction a lot of these homes you
guys see behind me are sold so before
they can even you know sell the hidden
inventory or inventory under
construction they first have to sell the
existing inventory that is right in
between you know people that already own
their homes and again to me it's no
clearer than what's going on in Texas
but real quick let me pull up the Fred
economic data months of inventory so you
guys can see where we're at on a
nationwide average and as you guys can
see we're basically at 8.6 months and
you guys know that anything over six
months is considered a buyer's market so
the fact that we have 8.6 months of
inventory and new construction is a big
deal now what's really interesting guys
is you guys see that truck right behind
me right there I think that guy is
following us around I have no idea but
I'm pretty sure he's following us around
so I'm not sure what he wants but that
guy's been all over the place where
we've been filming but again you know
we've talked about hidden inventory we
talked about the price Cuts but look at
the existing inventory that we have
right now
and again I thought it would be
especially appropriate to walk down a
block of homes where half of the homes
are already sold and half of the homes
are still under construction or have
completed construction and are now on
the market and this is especially bad
you guys for any one of these people
that have just recently purchased
because these price cuts are going to
affect the existing owner's ability to
refinance or sell for profit and things
of that nature because as these homes
continue to go down in price as they
sell them it's going to basically trap
all of the basically everyone that you
see with a car on their driveway it's
not good because quite frankly What's
Happening Here guys is even though the
interest rates have gone down they're
offering you know rates in the low five
percent and then the four percents it's
still not enough incentive to take care
of the hyper supply problem that is
going on right now in Texas I've already
said new construction will be one of the
catalysts for this housing market crash
as well as unaffordability as well as
prices so there's is a combination of
things that are going on right now so I
hope you guys got a good view of this
you know we covered the overwhelming
amount of existing inventory you guys
can see that basically
all around me I mean it's really
intriguing being in a master plan
Community right and doing this and
really what's intriguing is I'm
wondering
what that truck is doing in that Dodge
because
they just pulled out of their parking
spot and started heading this way
so I'm gonna I'm gonna keep walking this
way but it's basically this dodge right
here
I don't know maybe they don't want to
say hi maybe they do want to say hi
either way you guys let's move on to the
last part of this video where I kind
where I take you guys to my conclusion
and go over real quick the Meltdown of
the rental market so all of the trends
that I mentioned alone are going to have
incredible pressure on median sales
price and the prices and Equity of homes
and remember this you guys you know and
think about this very very carefully all
of these Trends are happening without
our confirmed recession without our
foreclosure wave without an increase of
unemployment so what do you guys think
is going to happen as 2023 continues to
play out so when all of that goes down
obviously it's going to magnify the
existing trends that we have now and you
guys can see you know I'm standing you
know around look at all of this land to
developed I mean there's different
levels of construction there is so much
going on right here it's just really
really surprising you guys really really
shocking the reality of what's going on
in Texas right now I mean this is this
is not going to be good for these new
home builder and one thing that these
Builders were leaning on in the event
that they got trapped in a recession or
a downturn was turning these single
family residences into rentals and
selling them to institutional investors
but really A really you know a sticking
point and something that I'm paying
close attention to is the rental market
and right now you guys what we're seeing
is an utter you know is a complete
meltdown of the rental market right now
and that complete meltdown of the rental
market again is just going to add more
flame to the already burning fire and I
truly believe that as a primary result
of the rental market it's going to put a
lot of these new Builders and a lot of
these investors In Harm's Way when it
comes to paying their bills essentially
and it will force some people to
actually you know liquidate their homes
in order to you know get through a
potential recession you know I guess
when all is said and done is I really
don't believe that Texas is going to
make it out of this recession we're
already seeing it happen in Austin but I
believe that Houston and the surrounding
areas like I'm in right now it's going
to follow the lead of Austin I mean it's
only a matter of time before the rental
market breaks down before demand is
completely shattered demand is already
bad you guys we've had interest rates go
down again into the low 60s high five
percents again and even though that did
create some initial demand the months of
Supply is going up Across the Nation so
it's still not enough to take care of
this unaffordability problem and as
again we move into 2023 that
unaffordability problem and the
quantitative tightening is really really
going to be felt by America by investors
and by home buyers I believe right now
that the longer that we wait going into
2023 the better deal that we're going to
get and again I suspect that right
before my eyes in the state of Texas
that I'm going to be able to start
finding and showing you guys some deals
of our lifetime I mean what are they
going to do guys I'm going to look at
this let me pan around here
you guys see all that land
so let's recap real quick and then I'm
going to let you guys go so let's just
recap so not only do we have a massive
amount of inventory 8.6 months not only
is do we have a historical amount of
homes under construction right now at
1.7 million look at all of the permits
the permitting that's being done look at
all of the land look at all of the
existing projects you guys this problem
I'm telling you right now this problem
is not going to go away and as a result
it will give us some of the best buying
opportunities in our lifetime and I plan
on bringing you guys front and center to
that happening now other than that guys
I really hope you guys got some value
insights and perspective and if you're
out there investing in real estate you
know I wish you luck and I hope you win