Interestingly, Barry Habib (MBS Highway Founder), Ken McElroy (famous real estate investor), and some dude on Reddit all recently made the case for much higher housing prices – DESPITE HIGHER RATES.
And all of them were responding to all of the housing bubble fears we see everywhere now on social media and in the press.
It’s All About Inventory
Habib is emphatic about the lack of a bubble, comparing the 2008 meltdown era to today.
Habib points out that there were 3 million homes for sale in 2008, compared to only 1 million now.
And – we have 14 million MORE households today too.
It’s About Higher Rates Too
In this short YouTube video, Ken McElroy points out that we are short 5.5 million homes now and why inventory will only get tighter.
Inflation and higher building costs will make it harder for builders and investors to pencil out cash-flow positive projects, so they will build less (a lot less).
And higher rates will make it far more likely that homeowners will stay put – because they will NOT want to give up their ultra-low interest rates.
The Reddit Dude
And finally, the Reddit Dude makes the same case in this thread.
He points out that homeowners won’t sell because they will not want to embrace the higher payments that will come with financing a new residence that will involve much higher rates.
And – he points out that starter homes are still selling for well under replacement cost because of inflation. So, we will not see more of them.
As a result, the Reddit Dude is still buying too!
And – if you can’t trust some dude on Reddit, who can you trust? 😊
Anyway – this is great info to share with clients who may have cold feet about buying because of all the fearmongering taking place right now.
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