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Why a Housing Crash is 100% Certain - with Keith Weinhold and Ken McElroy
• 59 minGet our newsletter free here or text “GRE” to 66866. Are you curious about the direction of rents and property prices? In this episode of Get Rich Education, host Keith Weinhold dives into the absolute 100% certainty of a housing crash and how mortgage rates affect home prices. Keith is interviewed by Ken McElroy. He also shares the importance of real estate in reducing taxes and increasing income. Keith discusses the attractive pricing and inflation in Ohio, and the benefits of investing in new build properties. He even touches on the increasing gold purchases by central banks and the potential impact on personal finances. Don't miss out on these valuable insights and learn about the prospects for a housing crash. Tune in now! Title [00:01:37] Advertisement for Freedom Family Investments An advertisement for Freedom Family Investments and the benefits of investing in real estate. Title [00:02:00] Introduction to Get Rich Education Keith White introduces the podcast episode and talks about the longevity and popularity of the show. Title [00:03:54] Real Estate Price Gains Since the Start of the Pandemic Keith White discusses the cumulative home price appreciation in different regions since February 2020. Title [00:12:33] Discussion on the attractiveness of real estate pricing and the impact on renters. Title [00:15:08] Keith's personal experience of starting with a fourplex and the concept of house hacking. Title [00:19:38] Exploring the house hack model as a solution to affordability issues and leveraging other people's money for real estate investment. Title [00:22:12] Investing Out of State The speaker discusses the benefits of investing in real estate out of state and the importance of choosing the right market and team. Title [00:24:58] Importance of Prioritizing Market and Team The speaker emphasizes the importance of prioritizing the market and team before considering the property in real estate investing. Title [00:27:19] Supply Crash vs Price Crash The speaker explains the significance of the housing supply crash that occurred in April 2020 and how it affects property prices and homelessness. Title [00:31:51] Inflation Measurement Challenges Discussion on the difficulty of accurately measuring inflation due to various factors such as personal preferences and hedonic adjustments. Title [00:34:05] Housing's Impact on Inflation and Interest Rates Exploration of the significant contribution of housing to the Consumer Price Index (CPI) and its implications for future interest rate changes. Title [00:35:38] Paradox of Rising Mortgage Rates and Home Prices Explanation of the counterintuitive relationship between rising mortgage rates and increasing home prices, with historical data supporting this trend. Title [00:42:28] Advantages of Investing in New Build Properties Discussion on why it makes more sense now to look at new build properties than in the recent past. Title [00:43:49] Feasibility of Building vs Buying in Different Markets Comparison of the cost per unit for acquiring existing properties versus building new ones in different markets. Title [00:46:28] Turnkey Rental Properties and Scarcity as an Investment Theme Exploration of the concept of turnkey rental properties and the importance of investing in scarce assets like real estate, gold, and bitcoin. Topic 1: Central banks buying gold [00:51:38] Discussion on how central banks are buying gold as a way to store value and hedge against the inflation and debasement of the US dollar. Topic 2: Increasing geopolitical uncertainty and gold [00:52:36] Exploration of how geopolitical events, such as trade agreements and conflicts, have led to increased uncertainty and a rise in the price of gold. Topic 3: Reasons why home prices won't crash [00:56:46] Explanation of several reasons why home prices are unlikely to crash, including a shortage of homes, strict lending guidelines, government intervention to prevent foreclosures, and the slowing of new home construction due to higher interest rates. Resources mentioned: Show Notes: www.GetRichEducation.com/456 Get mortgage loans for investment property: RidgeLendingGroup.com or call 855-74-RIDGE or e-mail: info@RidgeLendingGroup.com Find cash-flowing Jacksonville property at: www.JWBrealestate.com/GRE Invest with Freedom Family Investments. You get paid first: Text ‘FAMILY’ to 66866 Will you please leave a review for the show? I’d be grateful. Search “how to leave an Apple Podcasts review” Top Properties & Providers: GREmarketplace.com Best Financial Education: GetRichEducation.com Get our wealth-building newsletter free— text ‘GRE’ to 66866 Our YouTube Channel: www.youtube.com/c/GetRichEducation Follow us on Instagram: @getricheducation Keith’s personal Instagram: @keithweinhold Complete episode transcript: Speaker 1 (00:00:01) - Welcome to Get Rich Education. I'm your host, Keith Weinhold, with a crucial update on the direction of rents and property prices. Then a discussion between Ken McElroy and I where I posit to his audience about why a housing crash is 100% certain and why what mortgage rates do to home prices is exactly the opposite of what everyone thinks. And more today on Get Rich Education. Taxes are your biggest expense. The best way to reduce your burden is real estate. Increase your income with amazing returns and reduce your taxable income with real estate write offs. As an employee with a high salary, you're devastated by taxes. Lighten your tax burden. With real estate incentives, you can offset your income from a W-2 job and from capital gains freedom. Family Investments is the experience partner you've been looking for. The Real Estate Insider Fund is that vehicle. This fund invests in real estate projects that make an impact, and you can join with as little as $50,000. Insiders get preferred returns of 10 to 12%. This means you get paid first. Speaker 1 (00:01:08) - Insiders enjoy cash flow on a quarterly basis, and the tax benefits are life changing. Join the Freedom Family and become a real estate insider. Start on your path to financial freedom through passive income. Text Family to 66866. This is not a solicitation and is for accredited investors only. Please text family to 66866 for complete details. Speaker 2 (00:01:37) - You're listening to the show that has created more financial freedom than nearly any show in the world. Speaker UU (00:01:44) - This is Get rich education. Speaker 1 (00:02:00) - Working from Hot Springs, Arkansas, to Palm Springs, California, and across 188 nations worldwide. You're listening to one of America's longest-running and most listened to shows on real estate. This is Get Rich Education. I'm your host and my name is Keith Weinhold. And with 456 weekly episodes, you probably know that by now. Hey, I'm really grateful that you're here. Carefully chosen buy and hold Real estate is not day trading. Rather it is decade trading. Yeah. I'm a decade trader. Perhaps you're one two. You just haven't thought of it that way before. Speaker 1 (00:02:41) - When I was recently with Ken McElroy in person in his studio in Scottsdale, Arizona, we produced a terrific media interview and conversation together that I'm going to share with you later today. But first, you know, it's not just you're out of control. Trader Joe's grocery bill. The entire world seems to be losing its battle with inflation. U.S inflation is still double where the powers that be want it. The UK recently stunned markets will need jacked up interest rates a half point to the highest level in 15 years. The ECB, Australia, Canada, Switzerland and Norway. They have all announced recent rate hikes. But Turkey Turkey is raising rates and astounding. 6.5%. Yeah, you heard that right. 6.5% all in one fell swoop. That's how much interest rates are going up there. Yet many say that it's not enough for them to get on top of their wildly out of control inflation. Now, let's get into a few real estate numbers here before my fantastic chat with real estate influencer in Great Guy Ken McElroy. Speaker 1 (00:03:54) - Now here's a great set of real estate numbers since inflation has hit real estate too. Okay, we'll talk about rents in a moment, but let's talk price first with credit to John Burns, Real Estate Consulting. Let's look at American real estate price gains since the start of the pandemic. Okay. So this is not annual. This is cumulative starting in February of 2020 up to today. Here we go. There is a national home price appreciation figure and then it's broken into ten regions. And I think this regional breakup is kind of quirky, and I'll tell you why in a moment. But nationally, since the start of the pandemic, national real estate is up 36%. But let's stop and think about what that means for a moment. Well, since that time, February 2020, which is when these figures are all tracked back to, has the real rate of inflation also been 36%? I'll just say that the answer is yes. Well, then real estate has no inflation adjusted gain in all that time. Speaker 1 (00:05:03) - Well, here are the ten regions cumulative gain since that time. Okay. Going from lowest to highest, Northern California is up 27%. The Northeast up 29%. The northwest is up 32%. Southern California up 33% cumulatively since that time, about three and a half years here. The Midwest is also up 33%. The Southwest up 38%. Texas up 40%. The Southeast up 46%. North Florida up 50%. A lot of castle markets there in north Florida, too. And the top appreciating region, according to this stat set since February of 2020 with 56% cumulative home price appreciation is South Florida. Yeah, up 56%. And now some of those regions mentioned like in the West, they were actually up more than this a few months ago and they've given back a little bit of their gain. But that is a great stat set. The only t
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