“50% Price Cuts!” & Other Outrageous Housing Crash Clickbait

Dave:
At BiggerPockets, we work really hard to bring you solid data backed information about the housing market, but there is a lot of content out there that is dressed up as data backed, but really it’s half informed or straight up lies. So today we are debunking some videos from YouTube’s Army of Crash Bros. Hey friends, this is on the Market. I’m Dave Meyer. Our guest today is Jeb Smith. He’s a real estate professional. He also runs a YouTube channel where he educates buyers and sellers on navigating the housing market. And part of what makes Jeb’s content so good and his analysis so interesting is that he just looks holistically at things and does a very good job of cutting through the bs. He doesn’t just cherry pick data to reinforce some narrative that he made up before he even looked at the data, like some of the people we’re gonna be talking about today. Instead, he presents honest, rational advice about what’s going on in the housing market, and that’s what we’re gonna do together today. Let’s bring on Jeb. Jeb, welcome to On the Market. Thanks for being here.

Jeb:
I appreciate it, man. Thanks for having me on.

Dave:
Yeah, this is gonna be a new format for us. We do talk a lot about headlines on the show, but we haven’t actually reviewed or discussed any YouTube videos before, but this is sort of your purview, so you’re the right guy for the job. Tell me Job, what video do you wanna discuss today?

Jeb:
You know, I like to pick the ones with the most dramatic headlines. Uh, the one we’re gonna do today actually has the word dramatic in it. Dramatic 50% price cuts in California house prices, major housing crash, and exclamation points after both of those. Oh, so this must be big time.

Dave:
You picked a juicy one. , something tells me there was a lot of these that you could choose from. It seems like on YouTube every day we’re seeing these like very dramatic predictions of doom and gloom. But what does this particular video discuss?

Jeb:
Well, the premise behind the video is that, you know, prices in San Francisco, um, are crashing or in California or crashing in general. Mm-hmm . If you, if you’re looking at the, the headline going more in the context of the video, it’s, it’s more Michael Bor, uh, YouTuber down in South Florida, walking through San Francisco and essentially talking about how values have crashed. But primarily talking really about one building in particular there in San Francisco. And then he also kind of relates it to the general downtown area, how businesses are vacant and just different things and trying to play out the story of how this crash is coming because of mm-hmm . You know, just a slowing overall, I guess, market in San Francisco.

Dave:
Well, we do hear a lot of negative sentiments about the California economy and the housing market, but how truthful or accurate would you consider this video?

Jeb:
Any, any sort of real estate is local, right? So when you, when you start looking nationally at, at real estate prices, at real estate supply at real estate in general, you, you have to go to a local market and, and then kind of figure it out back your way out of it. And in the case of this video, walking around downtown San Francisco and saying that businesses are vacant as a leading indicator of things to come understand that San Francisco’s had major problems over the last couple of years, uh, political problems, um, you know, which obviously we’re not gonna talk about here, but just homelessness, just a lot of different things that have pushed people away. And so that also translates into housing on top of the fact that San Francisco’s one of the most expensive housing markets in the United States even today, even with some of the data that he’s presenting in the video, you’re talking specifically about a market that’s had affordability issues.
You’ve got, again, businesses leaving, you had, you know, the work from home thing where people no longer actually have to be in the city per se, they can drive to the city. Just all of these different things playing into the environment there that if, you know, you’re on the outside looking in Yeah. You see that and you go, wow, this must be a big thing. Mm-hmm . When in all reality, again, real estate being local and the fact that we’re talking about one building in particular Yep. Which he’s pointing out in there, doesn’t it, it doesn’t support the idea that values are, are decreasing by 50% or anywhere close to it.

Dave:
Yeah. I I think it’s a little bit ironic that someone from South Florida is pointing to one building and extrapolating that to the entire state because literally a condominium collapsed in South Florida and no one’s saying like, oh my God, look at this. The entire state of Florida’s housing market is collapsing. And I agree with you. I’m not saying that San Francisco doesn’t have its problems. It’s pretty much the epicenter of the office crash that’s been going on. Yeah. There’s a lot of problems with retail, so I’m not trying to say that San Francisco is like the strongest housing market in the country, but I do think it’s important to look at the actual data and yeah. Housing prices in San Francisco have come down over the last couple of years, but they’re still up 20% over where they were pre pandemic. So saying like, this is like some huge crash, even localized in that local market does seem a bit overblown.

Jeb:
Well that and the fact that we’re pointing to a building that has structural issues.

Dave:
Yeah.

Jeb:
I think his, his reference was in 2016, I think it was 1.2 million or 2014 is 1.2 million and today it’s worth a million. Okay. That doesn’t tell the whole story. It doesn’t tell the fact that you’ve got a structural issue on a building that’s however many floors tall, that’s probably not going to be able to be fixed easily. And so,

Dave:
Yep.

Jeb:
That’s one side of it. And then, you know, another reference in the video is that you’ve got this $13 million condo that was purchased at some point in time, and that’s no long, it’s not even for sale, but he’s using Redfin as an estimate saying it’s worth six point something and, and then go referencing Zillow and Redfin as accurate indicators of what a, a house is worth. I often say all the time, like those are a tool in the toolbox. They are not the only tool, and in fact these are more wrong than not because they don’t have the ability to analyze different things. Like a $13 million condo in there. Well, what’s different between a $13 million condo and one that’s five floors down, nothing to the ai, they don’t know

Dave:
That’s right.

Jeb:
The floor, they don’t know the view, they don’t know all of the different intricacies of that penthouse versus something else. And so it’s really easy to point the data to support a narrative, a negative narrative if you don’t actually understand how it all works.

Dave:
Yeah, absolutely. It just seems like this video, and this is not just this one representative of a lot of, I guess like a whole category of video in on YouTube these days that just cherry picks a lot of data. And this is, I think this is a particularly egregious version because it’s not even data about a whole city. Like you said, it’s like picking one apartment. I would bet you I could find a similar situation in any market in the entire country Sure. Where a recent comp and comparing it to Redfin and saying, Hey, look, Redfin has a 50% decline po like predicted for this one. You could find that in the hottest market in the country. I would almost guarantee it. It’s just like showing something on screen I think is pretty compelling to people. But extrapolating that to some bigger trend is a really big stretch of the imagination for me.
And I also think that they use data points that are technically correct sometimes, but don’t actually say anything. They’re not really correlated to performance. Like talking about price cuts, for example. Price cuts are important to, to look at, but price cuts represent, they don’t actually tell you whether a housing market is crashing or changing or declining. What it represents is a mismatch between seller expectations and what people are actually buying. And for a lot of the last few years we’ve seen a lot of price cuts. ’cause sellers we’re just pretending that we’re still getting 10% year over year growth and they’re just posting it when really it’s actually closer to two or three or 4% year over year growth. And that breakdown between buyers and sellers needs to happen. That doesn’t mean the housing market is crashing. So I just think it’s like this another example of where they take data, but it’s not actually data that tells you anything useful about the health of the market.

Jeb:
No, I I, I say it all the time, it’s like, you know, I can point to a, a house in my particular neighborhood and say, okay, that house had a price reduction or it sold for X percent below the list price, but knowing the neighborhood, I know that that house was priced X percent above where it should have been to start with. Yeah. So the fact that it’s had a price reduction means absolutely nothing unless you understand all of the information surrounding it. And I think that’s what’s really, really important. And then kind of going back, just to point out a couple more things in the video, it’s, you know, he’s talking about a specific zip code, right? He often references a zip code. How often in a big city are you talking about a crash in a specific zip code? Yes. That particular building has issues.
Yes. That particular building homes are selling for less than maybe they were a couple of years ago, rightfully so because of what’s going on. But that in no way is translated into other real estate in say, Southern California or other parts of California in general, or even San Francisco for that matter. I mean, inventory in San Francisco or the, the, the list to, to sell ratio, uh, or the sell to list ratio rather. In San Francisco right now, as of November 30th from Resi Club, Lance Lambert is 1.04%, which means homes are still selling above the asking price as of that data.

Dave:
Yep.

Jeb:
That to me there, where’s the crash? Where’s the 20%, the 50% crash that we’re talking about?

Dave:
Yeah, exactly. That, that just isn’t there. They’re just looking at literally one data point. All right. Time for our first short break, but stick with us. We have more from Jeb Smith, including his housing market predictions for 2025 on the other side. Hey friends, I’m here with Jeb Smith and we are debunking clickbait videos about the housing market. Just to be clear, like I, I’ll I’ll use the same data you’re referencing here from, from Resi Club. Um, San Francisco has experienced correction. I think you could even argue it is sort of a crash. I don’t know, it’s down 10% from peak. So that’s, you know, that’s a significant decline, uh, again, up 20% year over year. But a, I think the thing that that data doesn’t show is that that decline happened a year or two ago. Like the market conditions do seem to have shifted and we’re definitely not back to where prices were in 2022. But the market is not like in some free fall. There was a decline during, uh, increase in interest rates. But it’s not like this is like an ongoing trend that is likely to continue into the future.

Jeb:
No. And you, you did say 20% year over year. It’s actually 20% since 2020,

Dave:
Sorry. Yes,

Jeb:
Correct. Thank you. So the year to date, so month over month, you’re down about a half a percent year to date, uh, 3.3% positive. So we’re actually up in, in 2024, um, year over year up 1.4%. And then since the peak down 10, up 20% since, uh, since 2020. So we were up 30%, not we, San Francisco was up Yeah. 30% at one point. And so now it’s down 10. Does that suck for the people that bought in 2022? Sure, it does. But that’s not all of San Francisco. That is probably a portion of the market there. And, and a lot of it honestly is related to tech. How, how well does tech do Yeah. That, that area is people coming in with RSU money and different things that a lot of other markets don’t have. And it’s speculative to some extent, but overall it’s, it’s still a strong market.

Dave:
Yeah, absolutely. And who knows what’s gonna happen. I was just talking to someone else on a different podcast about this, but it feels like we’re sort of at the beginning of this huge, very exciting AI boom in the US and you have to imagine that San Francisco is gonna be a benefactor of that in some way. I know there’s other things going on, but you know, I would imagine that there’s gonna be some demands coming back to that city. Also, just wanna mention that, although again, there has been a decline from the peak, uh, in San Francisco. That’s true of a lot of places. Sure. 2020 major US metros out of the top 50 have seen a declines o off the peak. So this is not abnormal. Um, I wanted to turn, ’cause you’re from, you’re from California yourself, right?

Jeb:
Yeah, I, I live in Southern California.

Dave:
Okay. Yeah. Yeah. So we talked a little bit about San Francisco, but this video also sort of says the whole state of California is going to be impacted by the supposed crash. Can you tell us a little bit about the reality of what’s actually going on in California? And I know it’s hard to generalize, but like, maybe let’s just talk a little bit more about Southern California.

Jeb:
Yeah, so Southern California where I’m located, um, you know, we’ve, we’ve definitely seen a slowing in the last year. Um, home prices, I think Orange County Register, you know, our local newspaper here in Orange County I think said we were up about 10% at one point this year. So home values are, yeah, it’s a slower market. Affordability’s still an issue, um, for a lot of people out there, but the reality is people are still buying homes. We’re still selling property, you know, inventory is up. But we’re, you know, I think as of yesterday we were sitting about 3000 active single family condos, town homes, everything on the market here in Orange County. Whereas in a normal pre pandemic market and average between say 2017 and 2019, if we took that average, it would be about 5,500 homes. So we’re still down considerably from where we were prior to the craziness of, of the pandemic.
And so the reality is we have more supply, but in, when looking back historically, we’re still down a lot and so mm-hmm . It’s really easy to use these year over year metrics and say, you know, prices are up 10% or they’re down 10% or whatever. When you’re comparing it to extremely low levels, just in general of home sales of just an overall slowing housing market. And so with that, yeah, it’s like any other market, I would say that, you know, we are in a special place where we have good weather. There’s a lot of, a lot of money in Orange County. And so, you know, you go out on a Tuesday and there’s a weight at a restaurant. And so the idea of this slowing economy, this slowing, yeah. It, it doesn’t necessarily exist so much where we are just because everything is still booming to some degree. But it’s, it’s relative. It’s, uh, it’s not the craziness of 21, 22, but there are still houses out there where multiple offer situations, it’s just not as common as it was, uh, you know, 6, 8, 12 months ago.

Dave:
It sounds like the situation in Southern California is pretty representative of what’s just happening on a national level, which is that prices are still up, but it, the growth rate is going down. You know, we got sort of used to, uh, the pandemic years of seeing home prices sometimes in the double digits, but having home prices grow somewhere near the pace of inflation, 2, 3, 4, 5%, that’s normal. Absolutely. That’s a absolutely normal housing market. And so we are seeing that trend right now. Could it go lower next year? I would love your opinion about that, but maybe, but like that, that is just not what’s happening right now. So I just want to round out our conversation about California and what’s happening today, and then maybe let’s talk a little bit about what you see going on in the future. Like we have started to see inventory pick up a little bit

Jeb:
Mm-hmm .

Dave:
Uh, and demand is kind of seesawing a little bit based on interest rates and political news and all of that. Do you have any thoughts on where the national or specifically the California market is going in the next year?

Jeb:
You know, I think it’s going more towards a balanced market, honestly, than anything else. Um, I think the whole idea of a six month supply of homes nationwide being kind of the tipping point between a buyer and seller market, I don’t, I don’t necessarily agree with that these days. Mm-hmm . Just because I, I think a lot of demand got pulled forward, um, because of low interest rates and, and things during the pandemic. So that’s gonna offset that a little bit. Uh, so I think more a balanced market. I think buyers have a better opportunity than they did two years ago. Um, just because I do think inventory is going to continue to come to the market. I think more sellers, more homeowners rather, are getting the idea and, and under the mindset that they may have to take a higher rate in order to sell their home, that they’re no longer, they’re probably not gonna get that two to 3% interest rate again, or that 3.5 percentage trade again, that they’re gonna have to accept going in with a higher rate.
I mean, I have clients that said, I’ll never sell this property. It’s, I’m staying in it forever. And now they’re calling going, you know what? I might be willing to sell this property, you know, just because it no longer fits where I am in my life. Mm-hmm . And so I think that is, is, you know, it’s not just a southern California thing that is a national thing. People bought homes and things have changed in their life. And so balance, I think is, is one thing. Um, I do think if rates stay higher, that is going to allow supply to grow and, and to probably become more and more balanced. With that said, though, I think nominally home prices are probably three to 5% next year in 2025. Um, on, in a real term basis, you could have markets that are zero, um, yeah, that maybe even slightly below, just depending on what’s happened to inventory in those levels. I mean, south Florida’s a, a good example of insurance issues, HOA fees issues, just some other things adding into it. You don’t have the migration there because of some of the things that have changed. And so all of those things added up probably a little bit slower housing market. And so could those areas see, see more of a decline? Sure,

Dave:
Sure.

Jeb:
But again, real estate’s local.

Dave:
Totally. Yeah. Good. I I, I tend to agree with your analysis, just want to clarify something Jeb said. Uh, nominal just means not if inflation adjusted. So if you just like look at the numbers, home prices might be up three to 5%. Another way to look at that is what we call quote unquote real prices, which is when you essentially subtract the rate of inflation from price growth. So if you had 3% home appreciation and inflation was 3% next year, that would be flat real growth. Um, and so what Jeb was saying is basically well expect to see relatively normal levels of nominal, uh, growth, but with inflation, you know, you might have zero 1% relatively flat prices when you compare it to inflation. All right. Well, thank you for, for the great, uh, the, the great video here. I, I guess I would say I like, I don’t know if I’d say I enjoyed watching this video, but it’s like one of those things I sort of love to hate. Like I get excited watching them because I, it gets my blood boiling and I can’t wait to talk to someone who actually looks at the real data and thinks about this in a much more critical and honestly and more ethical way. And so, uh, thank you for bringing this one. Yeah, no, appreciate it. If you had to retitle this video to something more accurate, what would you call

Jeb:
It? I would say something along the lines of the Millennium Tower in San Francisco has dropped or crashed 20% or whatever that number is.

Dave:
Yep.

Jeb:
versus California Housing Market.

Dave:
Yes. So actually title it based on what you’re actually talking about, not making these sort of frivolous extrapolations .

Jeb:
Exactly.

Dave:
Okay. Well, thank you. I I think that’s a much more honest title. I don’t know if the YouTube algorithm would favor that one so much. Yeah. It’s probably not gonna get as many quote. Yeah. Yeah. But I think that’s more accurate.
Okay. We have to take one final break, but when we come back, all hell breaks loose. Or at least that’s what the title of the video I’m debunking says. But does it actually stick around? Hey, investors, welcome back to On the Market. So I found a video, it’s a little bit more macroeconomic in nature, but I think it gives you a run for your money in terms of how dramatic the title is. It is All Hell Breaks Loose this December worse than 2008 says economists. And this comes from Sachs Realty, and I picked this one ’cause there are a ton of videos like this, but I liked that they gave a specific timeline for when all hell would break loose. And I’m sitting here, it is December right now, and at least by my standards, all hell has not broken loose economically speaking, uh, at, at the very least, I don’t know if you’re seeing something different, Jeb, but I’m, I think we could call this prediction wrong.

Jeb:
Uh, yeah, yeah. Yeah. It looks to me at the moment that the job market’s pretty stable. Um, obviously we get, you know, by the time this comes out, we’re gonna get the latest jobs numbers, but it’s, uh, jobs look stable, inflation is still in place. Um, yeah. The things are seem to be moving along the, the soft landing, at least by the data looks to be, um, happening when in fact, in the video it says that’s not gonna be the case at all.

Dave:
Yeah. So in this video, they talk a lot about different things that could lead to a recession mm-hmm . And the common refrain is the guest, the economist on this show keeps saying that there is no soft landing if you haven’t heard that term. It’s basically just when the Fed started raising interest rates in the beginning of 2022, this term came around, I don’t know who actually coined it, but the idea was like, can they raise interest rates without causing a recession? And so far that has been true. We have not seen a typical definition of a recession. If anything, you might have actually said that there was a recession in early 2022 when we had negative GDP growth. But since rates went up, we actually have not, we have had positive GDP growth, um, every single quarter. And although it did come down a little bit last quarter, it is still up.
And so I think it’s pretty tough to argue that anything but a soft landing has happened so far mm-hmm . And, but the, the, this video talks and says that in the future we’re gonna avoid it. Like there is going to be a recession. Um, and I guess what bothered me about this video is that the points that they make is just so vague. They’re just saying stuff like, oh, there’s a lot of credit card debt. Or they just say things like money printing, but there’s not actually any specifics or actual analysis of the economy that’s going on. Um, and it just seems to me like they’re just trying to like, you know, get people’s fear stoked so that they’ll click on a video. Sure. How Jeb, do you look at the macroeconomic picture right now? Do you think there is still some fear of a recession?

Jeb:
I do. Um, I, I do believe there is. I mean, listen, I mean, a recession’s inevitable. It, it’s going to happen. Is it going to happen next week or next month or two years from now? It’s hard to say. Right. And so part of his video is the inversion between the two. I mean, his comments is the inversion between the two and the 10 year, and how it’s never been inverted this long, and that that’s inevitably, and then he also uses the buffet indicator being at 200% of, you know, market value and just different things, which again, historically speaking, these have been indicators of a recession. And I’m one to believe that the market’s probably a little bit slower than some of the data. Mm-hmm . Gives it credit for, um, some of the data’s lagging. I I do understand

Dave:
That. Yep.

Jeb:
Um, but overall the market seems to be continuing to just push this stuff off. I mean, when we look at the jobs market and we look at inflation, inflation has come down mm-hmm . Um, you know, we’re still in very restrictive policy. The Fed can, can come out and continue to reduce interest rates, which I think they will in December Yep. And will still be restrictive. We’ve got some time before it really matters. And they’ve been very transparent. So the fact that even if they do it probably have little to no effect on the market in general. But those things are one side. So yes, you know, inflation is slowing, that’s a positive for the overall economy. The fact that, uh, p policy is so restrictive and we haven’t seen unemployment really go up. We did see it jump, but then it kind of stabilized and it’s been at that level for the last couple of months. So until we see a break in jobs and jolts and, and, and some of these different indicators, there’s no reason to think anything other than status quo. And you gotta Yeah. You know, there, there’s the saying, and I often say it, it’s, it’s, you know, the market can remain irrational longer than you can stay solvent. And so you can apply that in however you want. The housing market can remain irrational. The stock market can remain irrational. All of these things can remain irrational. But the reality is, as long as there’s demand for these

Dave:
Things mm-hmm .

Jeb:
Which at the moment there is you, you’re going to have a, an, an economy continuing to do what it does.

Dave:
Yeah. I, I agree with you analysis, there are mixed signals, that’s for sure. So it is easy, especially in these types of videos to cherry pick just one side of the economy and say, Hey, all these things are not going well. Yes, there are, you know, the yield curve is inverted and that has been inverted for a while, which is a pretty reliable traditional recession indicator. You know, the labor market has thrown some mixed signals, but as you said, has stabilized. But if you’re being honest, if you are like an actual analyst, trying to be honest and candid, like you have to look at both sides of these equations because those two things do signal some risk for the economy. But on the other side, there are things that look really good. If you look at mortgage delinquency rates, for example, the guy in the video repeatedly says, conditions look like 2008 conditions look like 2008. 2008 housing market crash was caused by bad credit. Right. Correct. Look at the credit quality right now. It’s excellent. It not even just, okay. It is excellent compared to any time in US history. And so if you’re being honest about this assessment is a mixed bag, and that’s, again, not a sexy headline, but the reality is that there are some things that are pointing positive and there are some things pointing negative, and it takes just a much more nuanced look at these things to truly understand what’s happening.

Jeb:
No, and, and I mean, this is a housing podcast for the most part. And so when you relate all of that stuff to housing, and you look at housing nationwide and see that 40% of homes are owned free and clear, there’s no mortgage on them at all. And of the remaining homeowners out there, I think it’s like 60 or 70% have an interest rate below 4% or 3% or whatever the number is. And even

Dave:
I think it’s something like 90 something percent or below 5%.

Jeb:
It, it, I mean, it’s an incredible number. And then even then the amount of equity in these properties. So, and he even references it kind of, you know, kind of goes against himself in the video and basically says that like, people will keep their housing if, if things go sideways. Absolutely. You have to have housing, you don’t have to have a stock.

Dave:
Yes.

Jeb:
You don’t have to own Bitcoin or crypto or anything, but you have to have a roof over your head, or at least you want one over your head. Um, and, and so yes, can a recession happen? Sure. But the idea that, you know, fed stimulus and, and quantitative easing is not going to help. Look back to 2020. Look what quantitative easing did. Mm-hmm . It, it did exactly what it was in intended to do. It helped the consumer mm-hmm . It put more money in their pockets. And what happened over time is that money came and, and got used in the economy. Now that caused other issues, but you can’t say that quantitative easing didn’t do what it was intended to do, because that’s exactly what it did. It was to help the consumer out and get ’em out of a tough position. And, and honestly it was, it was probably there for too long.

Dave:
Yes.

Jeb:
But it’s really easy to say, looking back at what they did and say, oh, you should have done this. It’s, you know.

Dave:
Totally. Yeah. I, I wanna hit on something you said earlier about people holding onto their housing. Housing is just a unique asset class. Like you said, no one needs a stock, no one needs cryptocurrency, they need a house. And so the only time we have ever really seen a significant crash in housing prices in the United States was in 2008, and that was because of what I would call forced selling. The only time prices really crash is when people can literally no longer afford their payments, and they’re going to be foreclosed on. Otherwise, almost every person will choose to hold onto their house rather than selling at a loss. And that is something that we’ve seen for the last couple of years. People can make their payments look it up, the mortgage payments schedules, they’re all good. People are paying their mortgages even during this quote unquote downturn.
And there are things that are turning down, but it is not impacting people’s ability to pay their mortgages, which means in almost all cases, they’re going to avoid and fight like hell to not sell that asset below what they bought it for. And so they’re very likely to just stay in that home or rent out that home and to not actually sell it at a loss. And so, unless something changes where the average home buyer, a homeowner, excuse me, can’t make their mortgage payments, uh, then I just, I just can’t, Ima I don’t think it looks like 2008 at all. Like they, that in that situation, people couldn’t pay their mortgages. This situation, people, everyone’s paying their mortgages, it couldn’t look more different to me in terms of the fundamentals.

Jeb:
No, uh, agreed. And, uh, I, like you said, 2008 was caused by housing. Housing was the reason for the issue. Now it’s the amount of equity, the, the things that we’ve just talked about, the credit scores, all of those things are sitting at the best levels that they’ve probably ever been at historically speaking. Yes, affordability sucks, and some of these other metrics suck, but the reality is there’s still demand out there. We’re still hitting 4 million plus homes a year mm-hmm . Um, in home sales, um, even in these environments. So yeah, I think as rates come down, there’s probably more demand. And, and again, you get, you, you, you, you have a housing shortage nationwide. And so that should have been the video that I picked as one of the ones that said housing shortage wasn’t, wasn’t a real thing, but

Dave:
Yeah. Oh, yeah. Except everyone, every independent analysis says the same thing. So you would have to think perhaps it’s correct. , the last thing I wanna say about this video that sort of gets me going is like, I feel like a lot of these doom and gloom YouTubers conflate perhaps intentionally long-term and acute economic issues. Like they talk a lot in this video about debt and the, the US national debt. Mm-hmm . I’m concerned about it too personally. Sure. I think it, it is going up, it is going up at a rate that we’ve never seen, uh, and this has been happening for a decade or more, right. That is a big, long-term issue. Does that mean the market’s gonna crash immediately? I don’t personally equate those two things. Is this probably gonna come back and impact us at some point? Probably. I don’t know exactly how, but saying that, Hey, look at the debt.
The debt is exploding. We’re gonna have a crash this December. It’s like the debt has been exploding for decades, like it, and it hasn’t impacted us. I don’t think we get the free ride forever, but like, I just hate that they’re looking at these sort of like long-term issues like quote unquote money printing probably a big issue. Does that mean that something in December is going to happen? that’s going to change all hell is going to break loose because we’ve been printing too much money since 2008. Like, I don’t think so. I think that these things are probably longer term issues that are gonna unfold in hon in ways, honestly, I don’t fully know. Like, I don’t understand how we’re gonna get outta this debt situation, but I’m pretty sure it’s not gonna like come and become this like, acute issue in the next month or the next three months, or even in the next year. Like, it’s probably gonna take longer for that situation to work itself out.

Jeb:
I couldn’t agree more. I, I, I mean, it’s definitely an issue. Um, it continues to grow. I mean, we’re, we’re above, you know, we pay more in, in, in servicing our own country’s debt than we do in in the national defense budget. That’s a problem.

Dave:
Yeah. It’s insane.

Jeb:
Um, but the reality is we’re gonna continue to print money. We get into a problem, we’re gonna print money, we’re gonna sell bonds, we’re gonna do the things that we’ve been doing in order to allow the economy to continue to do what it’s been doing. And at some point, we pay the price. Our kids pay the price, somebody pays the price. But it’s, it’s something way above my head that I, I truly don’t understand how you get out of it this point.

Dave:
Yeah. And I don’t really think anyone does. You look at very smart economists, very smart business people, all ends of the, you know, experience levels, parts of the economy, pol at both sides of the political spectrum. Like everyone says something different about it. No, the truth is that no one knows. And that’s scary. Like, I admit, like, I think that’s, that’s concerning. But again, I think if we’re in these videos talking about what happens this year, what happens in the next year, I think it’s pretty unlikely that the entire US government’s gonna decide that they’re gonna just shut off the money tap in the next year without a plan to like ease that transition. So we’re probably gonna continue to see more of the same, at least for the foreseeable future.

Jeb:
I couldn’t agree more.

Dave:
So, Jeb, before we get outta here, I’d love to just have sort of a more high level conversation here about how to debunk these things. Like it’s, there’s so many videos. People present themselves very credibly in a lot of these videos. They cite data. How do you sort through what is noise or click bait and what is real and worthy of attention?

Jeb:
You know, that’s, it’s hard. It, it’s difficult. Um, you know, YouTube has become a another media source for, for, you know, a lack of a better term. And, and what I mean by that is how do you get clicks on a news article or, uh, you know, something to watch on tv. You make it as as fearful as possible so that it impacts you directly, um, or has a, it’s speaking to you in some way that you want more. And so it’s really easy to read the headline and not actually for one, even watch the video or read the article and just take what you read there and then start to cite that, right? Because that happens. And you know, one thing I say all the time is you have to understand the context. Don’t just read the headline, go into it because the headline’s meant to grab your attention.
But oftentimes they’ll either debunk the headline or they’ll talk specifically in that headline or about that headline and what they were talking about, you know, specifically. So it’s like, yes, prices have crashed, but it’s because of this or this or whatever. So it’s actually going through the, don’t just read the headline, read the article, but I would say also look at both sides, right? Mm-hmm . If you’re somebody who thinks that the economy is slowing, you think there’s a crash coming, that’s okay. We all have our biases and we all kind of lean into our biases, and that’s what we tend to watch and want to want to see more of. But the reality is you have to go to the other side and at least hear the points and the arguments and how the data’s conveyed. Um, and because it, it can oftentimes conflict with one another.
And I think we don’t like hearing people, you know, talk about things that we don’t agree with. I mean, I’m one to tell you like housing, I hate watching housing crash videos because it’s, it is, it just, it’s not accurate. Yeah. And I know it’s not accurate, so I get frustrated with it. But the reality is you have to see both sides and see where they’re coming from in order to come up with this stuff. And then, you know, I think the easy thing is find a good source of data, right? Like Resi Club, I mean, you know mm-hmm . Lance, um, he provides really good data. It’s housing wire, some of these sources where there’s not necessarily a, you can say there’s a bias to one side because, you know, they’re pro housing or whatever, but the reality is, it’s, it’s, it’s just there. Yeah. You can use the information how you, how you see fit. And so I think that’s important is finding a source of information where there’s a little bit of context about what the data means, and then you take it how you wanna take it. Um, but unless it’s all pointing in one direction, you kind of have to realize that it’s, it’s not, you know, necessarily doom and, and gloom. It’s, again, more localized and, um, than anything else.

Dave:
Great advice. I, I feel strongly about trying to look at things from both perspective. If there’s a new policy, if there’s a new report that comes out, just Google, like, what do proponents of the new policy say? What do detractors of the new policy say? Just see what their ideas are. And like Jeb said, I know it’s uncomfortable, but like, that’s what it takes to like truly understand an issue is to try and look at it in a holistic sense. And I, I’ll add just two other suggestions there. One to back up, what Jeb said is like, try to get as close as you possibly can to the primary source of the data. A lot of times what happens is, let’s say Redfin or the US government releases some data, then some news source does an analysis of it, and then an opinion writer at a newspaper does an analysis of that, and then a YouTuber does an analysis of the person’s opinion of that report. And you’re so far from the primary source that you’re, it’s like a game of telephone. So my recommendation is always find the original source of what people are talking about and try to analyze that as best you can. The last advice I will give you is look at people’s track record. I think this, I always like, every time I see one of these YouTubers do a gloom on YouTube, I scroll back and I try to pinpoint the first time they called for a housing crash. And for most of them it’s like 2016, you’re

Jeb:
Scrolling for like, years.

Dave:
Exactly. So just do that, scroll back and see how long they’ve just been blatantly wrong. Like, I’m wrong about stuff all the time, don’t get me wrong. But I would like to think that if I was wrong about a housing crash for eight years, I’d probably give it up at some point . And not just continue to say the same nonsense over and over. Take a look at people’s track record and see if they’ve been accurate in the past, or if they’re inaccurate, which happens to all of us if they’re honest about being wrong about something, because that is the sign that someone’s gonna be truthful to you in the future.

Jeb:
Uh, great advice. I’ve been really wrong about rates coming down. I thought they would come down faster, more aggressively, and, and I was wrong. Um, and, and I’ve, I’ve admitted it many, many times. Hey, listen, I got this wrong. And, um, here we are today. So,

Dave:
Oh man, I, I go and look at this post I made, I think it was at the end of 2021, I put it on Facebook or on Instagram, and I was like, by the end of next year, rates will be at 4.2%. It was like 7.5. I was like, , I really missed that one. Um, but it just happens, like the economy is extremely complex. Like there is just so many variables here. And people like myself, people like Jeb do our honest best to try and help you understand what’s going on, but we’re going to be wrong. And I think the, the real hallmark of someone who you should trust is someone who admits when they’re wrong and who is willing to change their opinion when new data comes out or when new evidence arrives. That that should alter your opinion.

Jeb:
Agreed.

Dave:
Well, Jeb, thanks so much, man. This was a lot of fun. I enjoyed having you on.

Jeb:
No, I appreciate it, man. Great conversation, good stuff. Things I’ve been wanting to talk about for a long time. We’ve, you know, made it happen.

Dave:
Good. And if you wanna check out Jeb, his YouTube channel, all of that, we’ll make sure to put a link to that in the show notes in the description below. Thank you all so much for watching this episode of On the Market. We’ll see you soon.