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Home Builder’s Breaking RECORDS as 2009 Style Recession Gets Priced In Inventory Coming on Housing Market
The US economy is now heading toward a 2009 style recession according to Bank of America, and the banking crisis is now back in full throttle. Which means as the banking sector continues to be put under more and more stress, lending will continue to get tighter and tighter. We are already seeing lending standards tighten to the same levels we saw back in 2012, and the speed at which banks are limiting credit availability is accelerating faster than it did following the great financial crisis.
With all of this banking turmoil unfolding, the funny thing is the first sector of the economy we’d expect to begin slowing is not, the construction sector, home builders in particular. New data now shows construction employment is at record highs, and construction spending is also at record highs. We dive into this data and highlight the reasoning behind this, how these large public home building companies are using this brief window, where banks are still lending, to take advantage of the opportunity, and to try and get the huge number of houses currently under construction completed.
We also dive into where these 1.7 million homes under construction are located, which markets we can expect to see a surge in active listings over the next few quarters. As well as where home builders are turning their attention to next, by analyzing single family building permits authorized along with multi family building permits authorized last month.
This video is not financial advice….(read more)
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The Federal Deposit Insurance Corporation (FDIC) is bracing for a potential wave of bank failures as home builders seek to take advantage of a limited borrowing window. The COVID-19 pandemic has put significant strain on the economy, and as a result, many banks are struggling to weather the storm.
The FDIC, which insures bank deposits up to $250,000, has been closely monitoring the financial health of banks across the country. With the ongoing economic uncertainty, the agency is preparing for the possibility of more bank failures in the near future.
At the same time, home builders are capitalizing on a unique opportunity to secure financing for new projects. With interest rates at historic lows, many builders are seeing the current environment as an ideal time to expand their operations and take on new construction projects.
However, this increased borrowing activity is putting additional strain on the banking system. Banks that are already struggling to stay afloat are now facing the potential of taking on more risk by extending loans to home builders.
The FDIC is working to ensure that banks are adequately prepared to handle the increased demand for lending while also mitigating the risk of more bank failures. The agency is closely monitoring the financial health and stability of banks and offering guidance and support to those that are experiencing difficulties.
In addition, the FDIC is also urging banks to be cautious and thorough in their lending practices, especially when it comes to financing new construction projects. The agency is emphasizing the importance of conducting thorough risk assessments and ensuring that banks have a solid understanding of the potential risks associated with lending to home builders.
As the economic impact of the COVID-19 pandemic continues to unfold, the FDIC is taking proactive measures to safeguard the stability of the banking sector. By closely monitoring the financial health of banks and providing guidance and support, the agency is working to mitigate the risk of more bank failures while also supporting responsible lending practices.
In the meantime, home builders are making the most of the current low-interest rate environment, seizing the opportunity to secure financing for new projects. As the economy continues to recover, it will be crucial for banks and builders alike to exercise caution and prudence in their financial decisions to ensure the long-term stability and health of the banking and construction industries.
Inflation is far more harmful to individuals than a collapsing stock or property market because it directly affects people's cost of living, which they immediately feel. It is not surprising that the current market sentiment is extremely pessimistic. In today's economy, assistance is critical if we are to survive.
I think the details do not show the dire condition you are trying to promote. Yet, you still may be right.
First SVB, then signature bank and now first republic bank, these are all the signs of yet another 2008 market crash 2.0 , so my question is do I still save in the United States dollar or is this a good time to buy gold?
Morgan and Chase just bailed out First Republic Bank. So Jamie Diamond is the new landlord. Blackrock lost over a trillion dollars. Unfortunately they still own everybody's real estate and farmland. The FINK asshole always finds a way!
I think the immigration influx is driving the demand. I dont see a big dip in demand until the border is closed or a buyer freeze cause of affordability. But im not an expert by far. Input in appreciated
The 2nd of your videos I have watched today, you are smashing it!! Thank you for your content!
Yes, please report on what builders are choosing to build. Thanks.
BTR please
Can you do a video on the Build to Rent Craze?
That means the builder's will be cutting corners to hurry up and finish the job , I would not buy one
Great video! Please do a video on the rise of build to rent please!
it's on the internet you know it's true
Love your videos ❤
You blame the FDIC but you don’t hold the politicians Repukeblican President tRump and the Senators that voted against Frank Dodd !! The American public is the suckers because we vote for the ifiots that harm us and they laugh all the way to the bank
According to certain economists, it's possible that the U.S. and certain parts of Europe might experience a recession at some point in 2023. Although a global recession, which is characterized by a decline in annual global per capita income, is relatively uncommon due to the faster growth rates of emerging markets like China, in comparison to developed economies. I have pulled out more than $340k from my bank. After all, the FDIC covers only up to $250,000, and the implosion could have bad effect. Looking to invest into the stock market now. Does anyone know how I could go about it?
Excellent video RJ. Please continue your extremely insightful reporting on this topic as this unprecedented housing crash unfolds across America over the next few years…
The build to rent stuff is disgusting. I understand there are entire track home communities in cities in AZ being built where not a single home is for sale, they all go straight to rent. There should absolutely be regulations against that kind of practice.
I love how often you pump out content. thank you!!
Thank you for the information
This is one of your greatest videos yet, however, once again, I wish you would cover Horizon West, which is between Disney World and Orlando on the west side, these old farms and orange groves are being converted into tens of thousands of homes. And the I-4 corridor between Orlando and Tampa will be solid homes in the future. This is made up of both Orange County and lake county.
Huh, making "exception" for JPM is another step to support the level of corruption thats been happening on bigger scale throught various other parts of our society.
How about we hand the keys to our freedom to Pfizer, JPM, Reython and give those guys absolute immunity on everything (looking at you, J. Dimon – friend of Epstein, who didnt suicide himself).
#wearefu©ked
Why do you talk so slow, speed up your video in your editing software.
Something that needs to be mentioned. Multi family dwellings means that institutional investors will own those properties. The average person cannot afford to own a home, and will be forced to pay rent for the rest of their lives. This will be a disaster long term for those counties because all that rent will not stay in their area, but be siphoned out be out of state private equity funds. Those rents will not be affordable, and two things are going to happen.
One; those apartments will have a lot more people living in them than before. Bedrooms will be sublet, as will living rooms. This is occurring throughout the West Coast, where all these ridiculously overpriced apartments were built over the last few years, and they're jammed with people. Because the cities allowed these dwellings to exceed parking mandates, we ares eeing streets overwhelmed with vehicles, all due to this new construction.
Two; private equity investors in these rentals are counting on the Federal government to either pay the rent through enhanced HUD/Sec 8 funding, or bailing them out if that Fed rent subsidization doesn't manifest. Much of the construction financing comes from private equity, who control Congress. One way or other, they're going to get the taxpayer to bail out the biggest investors from nonsensical investments. That's why they're building like crazy, it's a calculated gamble. It makes no sense to us because very few people can afford the rent, but for the billionaires. it's a decent bet based on their political influence. That's never going to show up on any of these charts, but is how this game is rigged. I'm guessing, in this case, the big boys lose because Trump has already said he's putting an end to Fed subsidization of apartment construction…
Updates on Sacramento California please, thanks!
Big boys buying business for cheap
Is the government doing all of this to push their digital currency agenda? I feel like they are hiking rates to cripple the small banks so that the big banks scoop them up and ostensibly have more control over the people’s money? Call me a conspiracy theorist but I honestly think that’s the objective.
You deserve waaay more subscribers. Thank you RJ
Home builder’s what?
Do a video on multi units in miami dade county
I bet Biden used the FDIC to bailout SVB depositors because half the deposits belonged to China. See what their Biden bribes did?
yeah, would love to see more on the build to rent.
Yes please, build to rent video and how that will impact prices of single family homes in the areas with significant build to rent inventory coming to the market. Thank you.
The multi-family is being driven by federal government policy which forbid zoning laws against high density in suburbs if the county receives federal money. Dig into this RJ.