There’s so much information in the last video, I had to break it up into 2 videos. If you haven’t seen my last video that talks about the 2019 housing crash check the link in the description. In this video we are going to address the differences in today’s market vs the real crash of 2007.
Let’s pretend that YOU and I decide to land on Mars and we didn’t get permission. The reason we didn’t get permission is because scientists don’t think there is intelligent life on mars.
But let’s assume they are wrong and let’s assume there is intelligent life on Mars. And they have intergalactic space ships.
They get mad at us, jump in those spaceships and come to earth. And let’s assume they have super dooper ray guns that they can just point at a building and it disintegrates. Now. That would cause a housing crash! Sound like a good Doomsday story? That’s what people want us to believe about the HOUSING CRASH coming in 2019. Let’s put this fear to bed and address the differences in today’s market vs the real crash of 2007.
A big myth is that we are starting to see the same indicators that caused the bubble to burst back in 2007. And if you just read the headlines, I can understand why you would think that way. However, there’s more to the story when you look deeper.
Because interest rates are creeping up, people are now starting to take cash out of the equity in their homes. There’s a lot of articles and blog posts being written about CASH OUT REFINANCES. That’s what happened in 2007, people are starting to do crazy things again, we are about to see another crash. There were so many indicators that were involved in the bubble, but interest rates were never an indicator.
Ok, here’s where we need to all calm down and take a look at the numbers. When you look at 2005-2007 people took out 824 Billion dollars out of their house. Leaving them with NO equity left in their homes. Today, Tappable Equity….meaning they have to leave 20% equity in. Tappable is up 21% over the bubble numbers. Over the last 3 years, people have pulled out 172 Billion dollars of Tappable Equity. Now 172 Billion is still a large amount, but it’s less than a quarter of the equity pulled out during 2007.
In the past, people were pulling out money to buy things like motorcycles, jet skis, pay cash for cars and take that luxury vacation.
Now people are pulling the money out to do things like putting their kids through college, investing in business ideas. We are making smarter decisions. We are investing in appreciating assets, not getting out all the equity and putting it into depreciating assets like cars.
Right now 48% of the houses in this country have at least 50% equity in it. Almost one out of two houses have half their value available. If people are pulling out 10 to 30 thousand dollars to invest in a business or their kids college. That’s all good news! It’s going to make their lives, their kids lives and communities better.
I believe that EVERY family should feel confident when buying and selling a home and it’s my hope that you having a deeper understanding of the actual numbers. Not the fluff that’s behind the SCARRY, DOOMSDAY headlines that are out there.
By the way as a side note, those writers putting those headlines out there are hired to do one thing….write a headline or story that provokes an emotion and produces clicks on a webpage or YouTube channel and make money for someone else. And if you don’t know that, when you see some of these headlines and articles out there, sure it’s gonna make you feel uncomfortable about the market stability.
Still have questions about the market, don’t leave it to the Martians and their super dooper ray guns. Call me at the number below, then get packin, cause you’re moving!
***Statistics and Information from Steve Harney, KCM Founder & Chief Content Creator