All real estate is local.
This is an important point to remember. Also, we have to keep in mind that real estate markets do not operate like equities. For this reason, quick and sharp reversals are not common. We tend to see a topping then a bleed, in specific areas before spreading.
In this video I discuss how we are starting to see signs in some areas but not across the board. It is still early but it is something to be mindful of.
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it's still early days but the results speak for themselves so we have to wait a bit
We are trying to keep our eyes on it so that way we can buy something on the way down before it turns course and comes back.
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Summary:
In this video, Task discusses the real estate market, highlighting that while some areas are experiencing a downturn, he does not foresee a widespread crash. He emphasizes the importance of considering local real estate trends alongside macroeconomic indicators. Task touches on economic headwinds, rising mortgage rates, and the impact on lending and profitability. He expresses concerns about the sustainability of current economic conditions and suggests a shortage of money in the system.
Detailed Analysis:
Task starts by acknowledging that real estate is not his area of specialization, but he provides general observations and connects them to macroeconomic trends he typically discusses. He dismisses predictions of a real estate crash, noting that historical shifts in the market, like those in 2005-2006, are not the norm. He recalls how abrupt the real estate market decline was at that time, pointing out that real estate operates differently from the stock market due to various influencing factors beyond speculation.
The discussion then delves into localized real estate market observations, with mentions of areas like the West Coast of Florida, California, and Arizona experiencing downturns, while the Northeast appears more stable. Task emphasizes the importance of monitoring local market conditions and macro trends while exercising patience.
Moving on to broader economic trends, Task highlights rising economic headwinds, such as increasing weekly unemployment numbers and supply chain challenges. He mentions concerns about inflation, inventory problems in many areas, and the impact on equity markets, particularly driven by oil demand and OPEC's production plans.
Task critiques the Federal Reserve's decision to raise interest rates, expressing skepticism about the Fed's control over interest rates and foreseeing short-lived effects on mortgage rates in the macro perspective. He discusses the implications of rising rates on borrowing and profitability, noting that economic headwinds make it difficult for companies to undertake new projects at current interest rates.
In exploring the larger economic landscape, Task mentions the global dollar and collateral shortage, describing a "silent depression" characterized by poor growth rates, particularly highlighting the stark figures in the EU compared to the US. He closes with a warning about the concerning state of global growth rates and the implications of the current economic conditions.
Overall, the video provides a comprehensive analysis of the real estate market, intertwining it with broader macroeconomic factors and expressing concerns about the sustainability of current economic trends. Task's insights offer a nuanced perspective on the challenges facing both the real estate sector and the broader economy, urging viewers to stay informed and cautious in their financial decisions.