The Housing Market JUST Bottomed | $200,000 Profit Deal

Sellers Outnumber Buyers, Prices Skyrocket [0:00]

• The common narrative that more sellers than buyers leads to falling prices is challenged.
• Historical data from 2013 shows prices boomed despite a seller surplus.

• "So, you would expect, logic would have it, oh my gosh, there are more sellers, prices should have come down, right? No, the complete opposite happened in this particular scenario."

The Nuance of Housing Supply [1:33]

• Unlike commodities, houses are people's homes, and sellers have other options.
• Over 85% of single-family homes are owned by homeowners or mom-and-pop investors.

• "Again, because this quantity supplied is not a commodity. These are people's homes, and they have other options."

COVID-19 Market Dynamics [2:17]

• The massive price surge during COVID-19 was primarily driven by near-zero interest rates, not just buyer demand.
• The speaker emphasizes that the "sellers outnumber buyers" headline is often misleading clickbait.

• "My whole point of that argument is just because, oh, my gosh, home sellers outnumber home buyers has no bearing, you know, just because that's happening, it has no bearing on what the potential is for the housing market in terms of pricing."

Current Real Estate Market Conditions [3:10]

• Most of the country is experiencing price expansion, with some markets nearing a bottom.
• Worst-performing markets like Phoenix, Inland California, Austin, and parts of Florida are seeing smaller declines.

• "Markets that are getting closer to a bottom and the worst performing markets are still like your Phoenix, Arizona, parts of inland California."

Regional Price Growth and Policy Impact [4:15]

• Strong price growth is observed in markets like New York, Illinois, Ohio, and San Francisco.
• The speaker suggests that more liberal policies and housing affordability options can paradoxically reduce developer supply, increasing prices.

• "And, you know, this isn't a political video at all. The point of this is simply to say generally when you have more liberal policies and more housing affordability options, you tend to reduce the supply that developers are willing to provide to the market and things actually get more expensive."

The Real Estate Cycle Explained [5:36]

• The speaker presents a real estate cycle chart, dating back to 2009-2011.
• He explains how low interest rates during COVID led to demand, new construction, and eventual overcorrection in some areas.

• "When prices go up, you're supposed to see more development. Duh. And you're supposed to see, as is typical in capitalism, an overcorrection by developing too much and then, ah, crap, we can't rent all of this out and then prices come down."

Investment Allocation and Thesis [7:30]

• The speaker's startup, Reinvest, has approximately $100 million in real estate with no debt and about $1.5 million in equity securities.
• This allocation reflects a belief that "this is the decade to buy real estate."

• "I think we allocated this way because we believe in this thesis. And if you've been somebody who's been watching the channel, you know we've been calling this thesis since 2022."

Stock Market vs. Housing Market Outlook [8:55]

• The stock market is perceived to have some room to grow but not indefinitely.
• The housing market, in many areas, is believed to have already undergone its reset.

• "The real estate market, I actually think, is in a much different position. I actually think the real estate market is here."

Finding a Deal with the Reinvest App [10:20]

• The speaker demonstrates their Reinvest app, specifically the Homes AI tab, to find deals.
• A property in Santa Clara, California, is highlighted with an estimated equity gain of $104,000 on an $850,000 listing.

• "This is for sale right now. It is not my listing. This is a deal you could probably make $200,000 to $300,000 on if you do it right in equity."

Deal Analysis and Potential [12:30]

• The Santa Clara property requires renovations, including addressing potential mildew and updating the kitchen and bathroom.
• Comparables show similar 3-bedroom, 1-bath homes selling for around $1.2 to $1.3 million.
• Adding a bathroom and investing an estimated $150,000 could result in a profit of $200,000 to $300,000.

• "Every single comp has been like 1.2 to 1.3. I'm up two to three hundred thousand dollars on this purchase. This is a really good deal."