Speaker 1: You know, about twenty five percent of the country, Carrie
has a mortgage adder below three percent. About sixty five
percent of the country has a mortgage adder blow four percent,
and that is making for very, very unmotivated property owners.
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Speaker 3: And welcome.
Speaker 4: You are listening to and watching the Financial Survival Network.
I'm your host, Carrie lets We are doing a new
studio setup here and let me know how you like it.
Jason Hartman is on with me now. Jason, we wanted
to get an update what's happening with real estate. You know,
I don't think the stock market is going to collapse
for a while like everyone's predicting, because money is rushing
in there. And as long as the stock market doesn't collapse,
do you think that real estate's going to collapse?
Speaker 1: Definitely not. You know, three years ago, when the cost
of money tripled, carry and we saw the fastest mortgage
rate increases in all history. It really proved to the
country and the world how resilient real estate is as
an asset class.
Speaker 3: I mean, think of it.
Speaker 1: You take a credit based asset like real estate where
most people are financing it, and you triple the cost
of that money from those low COVID era rates to
the highs that we saw, and the market still doesn't crash.
It actually appreciates. I mean, I mean, who would have thought.
And I'll tell you where all of the doomers and
all the crash bros. As I call them got it wrong.
Is they looked at housing affordability from the perspective of
new people entering the market and they said, hey, housing
has become extremely unaffordable. That means prices are going to
drop and there's going to be a crash. Well, they
were right that housing was very unaffordable and still is
very unaffordable. However, what they were wrong about, and what
they didn't consider, is all of the housing stock that
was controlled by well over one hundred million people who
had incredibly low interest rates and realized that their mortgage
is not a liability, it's actually an asset.
Speaker 3: Asset.
Speaker 1: Yeah. Yeah, like you say, and I say, and that
mortgage asset. They didn't want to give it up. And
I still don't want to give it up. And I
predicted this very early on in the COVID era. You know,
people can go back and watch my old videos on YouTube,
listen to my old podcast episodes. They can hear me
saying this. I did not, unfortunately, give it a name.
The media later gave it a name, and they called
it the mortgage lock in effect. And that's that's what happened.
We're still experiencing it, and it is over time lessening slightly,
but not by March. You know, about twenty five percent
of the country carry has a mortgage adder below three percent.
About sixty five percent of the country has a mortgage
adder blow four percent, and that is making for very
very unmotivated property owners that want to keep their properties.
Speaker 3: Yeah.
Speaker 4: Well, you know, because unless you're going to buy your
new home for cash, then you're if you're going to
get a mortgage, you're going to if you want to downsize,
you'll get half the house and it'll cost.
Speaker 3: You more per month. So where's the incentive to sell?
Speaker 1: Yeah, you're absolutely right, there's not much incentive to sell.
Those people want to keep their properties. They don't want
to give them up. And you know, as I always say,
the one ingredient, the one absolutely required ingredient for a
housing crash is this. It's tens of millions of home
owners who are in distress that become millions of home
sellers dumping their properties on the market. And for the
last three years and still now we have the exact
opposite of that. We have tens of millions of homeowners
who are extremely comfortable and have very low payments and
very affordable houses. They are experiencing a very different economy
than a new buyer entering the market. It's just a
completely bifurcated thing. And that's why they won't give up
their houses, because the deals are too good. They got
to keep them.
Speaker 4: Yeah, exactly, exactly, even though they might want to downsize.
I've thought about it myself, but economically it makes no sense.
And your paydown of your equity happens, you know, your
paydown of your loan balance, your amortization happens so.
Speaker 3: Much quicker with a lower interest rate, right.
Speaker 1: Yeah, and with more time going by, and with inflation
induced debt destruction my trademark strategy. So yeah, absolutely, yeah.
Speaker 4: So if anything, it's it's gotten even more advantageous. But
what about for the people who you know, have to
take that six percent mortgage.
Speaker 1: Well, six percent ain't bad historically, that's for sure. I mean,
we got up to close to nine percent at the
worst points of this, and the market still continued to appreciate.
So it was the complete opposite of what all of
the doom and gloomers predicted and what they said. But
you know, we have a very significant housing shortage in
the country. And if you want to put my screen up, Carrie,
I've got some charts and things and maps to share
with people interest. So you know, there's quite a lot
of argument over how bad the housing shortage is. You know,
there are different opinions different experts, and they range anywhere
from a shortage a predicted housing shortage of one million
homes to over seven million homes. So experts differ in
their opinions of how bad the housing shortage is. But
no legitimate expert says there is not a shortage. Okay,
lots of you know, hacks on YouTube, publishing videos to
get clickbait that say there's no housing shortage, but they're
just wrong. That's just simply not true. Everybody that enters
the market and looks around for property to buy can
feel it. They know that.
Speaker 3: Uh.
Speaker 1: And there are less than eight hundred thousand homes for
sale in the country right now, and you know, compared
to what as I always say, well, there's about one
hundred and forty million homes in the country and only
slightly over one half of one percent of the entire
housing stock in the country is for sale, and that
is an extremely low number. The normal the normal market
is about one percent of the housing stock being for
sale at any given time. So inventory is very, very low.
And you know, I believe the experts that say it'll
be about seven more years, maybe six if we're lucky,
until the market reaches an equilibrium where we build enough
houses and the population growth has been slowing to where
we reach a normal equilibrium type market. So look for
that around twenty thirty two, maybe twenty thirty three.
Speaker 4: So here's a question for you. Trump mass deportations. Close
to a million have been deported already, two million if
self deported. If he gets rid of fifteen or twenty
million people, which is a stretch, but let's just say
it can be done. Is that going to have a
ileterious effect on the housing market.
Speaker 1: Well, first of all, I've got to say, you know,
there's a difference between my own selfish interest and what
is good for the country. And I hope he succeeds,
because we have got to clean up the country. America
is for Americans legal people that have entered the country
legally and not the process. Yeah, and done it right,
and they should be getting the benefits. We as taxpayers
should not be paying for, you know, fraudulent Somali day
care centers or housing vouchers for illegals. I mean, the
fraud and the it's just disgusting. I mean, you know,
now that all this fraud has been exposed, I just
keep wondering when Pam Bondi is going to start mass
arresting people. But I just think she's like bought off.
She must be part of the deep state, because it's
mind boggling to me how she just isn't making any
real dent in terms of prosecutions in my opinion, and indictments.
But that's maybe another topic obviously. So to answer your question,
you know most of those illegals are not renting, you know,
primary housing, They're renting very low end housing, so that
impact would mostly be felt by C class apartment.
Speaker 3: Own owners and the low low.
Speaker 1: End of the market. Now, in the case of Minnesota,
you know, a lot of those fraud frauds for Somalis
probably have really nice homes. Overall, it's going to be
better for the country, and I'm all for it.
Speaker 4: Yeah, yeah, well, you know, but if it's a substantial number,
then it's going to have an impact, probably in the
lower end, like you say. But then again, Trump always
says we want legal immigration. So maybe at some point,
you know, we've actually seen net outward migration from the
United States for the first time in decades, and maybe
at some point two three years down the road, that
trend will reverse because more legal immigrants will be coming
into the country.
Speaker 1: Yeah, hey, listen, I'm gonna I'm going to share an
idea with you and your audience. And if I could
get to Trump, I would love to tell him this idea.
I did get to shake his hand once very quickly
at Mar A Lago. You were there, and but you
know here, you're you're all familiar probably with his gold
card program where he's basically selling and and you know,
migration through investment is a common thing. It's done all
around the world. Many countries do it where you know,
you agree to invest a certain amount of money in uh,
you know, investments within the country, whether they be startup
businesses or some kind of you know, sovereign fund or whatever,
or buy some real estate there, and you you can
get a path to citizenship. And so Trump has been
selling and I think he's selling. I don't know how many,
but you know it's started.
Speaker 3: I believe.
Speaker 1: Five million each what he called gold card for five
million dollars. Okay, But here's what he should do, in
my opinion, is he should just print the money or
go into bigger deficits, I don't care what it takes,
and pay these people to leave. Start by offering twenty
thousand dollars and then go to fifty thousand dollars and
some people will take the bait and they'll just go
back to their own country. Okay, give them money, just
pay them to leave. It's cheaper than ice and everything else. Right,
But then but wait, then create a marketplace for US
citizenship and resell those same slots to people for like
ten times the price. So if you pay someone fifty
grand to go back to Samali, which seems like a lot,
right uh, and you sell.
Speaker 4: That sunds like a bargain to me, Jason, it sounds
like a bargain to me.
Speaker 1: I agree, I agree. But you know people, a lot
of people would say it's too much. Okay, But then
you sell that slot to a Norwegian or a Swede
whose countries are being ruined by immigration, right uh, you
sell that spot to them for five hundred thousand, for
ten times the amount the government would make money on that,
and it would be it would just massively improve the
country to have high quality educated people with capital, with ambition,
with businesses, bring all of that economic stimulus to the
United States. It would be a fantastic deal. You know,
five million dollars is great. You know, a lot of
very wealthy people will take that offer, and many have
from what I understand. But if it was thousand, there
you go, you'd get a lot more.
Speaker 3: I'm ready, I'm going I'm taking it.
Speaker 4: If he offers it to me, i'll go too.
Speaker 1: Well, no, you don't need to take it. You're already
a centizen.
Speaker 3: Yeah, yeah, it's that I want the money.
Speaker 4: I'll leave if you If he offers enough, Jason, I
will definitely take the money and leave.
Speaker 3: Sure, hey you can.
Speaker 1: You can now lay on a beach in Thailand and
enjoy life, you know.
Speaker 4: Yeah, yeah, absolutely, I won't even think twice about it.
Speaker 3: You know that.
Speaker 4: You know, I love the United States. I mean I've
been here in my whole life. But there are other
places in the world where we could go. But you
know the idea. Right now, they're paying them twenty five
hundred dollars to leave, and they seem.
Speaker 3: To have a lot of takers.
Speaker 5: So maybe you're maybe some good auction, maybe have an auction,
you know, and you got X amount at here if
you go now.
Speaker 3: But then it keeps going down. But once you put
your name in the auction, you're going no matter what.
And then we get even more for less money.
Speaker 1: Yeah, I think that's that's the way to do it,
you know, is just do that. I mean, you know,
the ice enforcement and the SELFI deportation incentives and whatever,
but like you really got to increase the incentive. Okay,
it's just got to be a higher incentive. But then
we sell those slots to winners.
Speaker 4: Yeah, well, Somali's eighty percent or on some form of
public assistance, and I guess the rest are ripping us.
Speaker 3: Off on fraud.
Speaker 1: Yet yet people can't afford grocery prices and housing and
healthcare and college tuition in the US. And that's who
you're supporting. You're supporting these criminals. It's just disgusting.
Speaker 3: It really is. Sounds anyway, did you feel good?
Speaker 1: Yeah, in terms of you know, maybe you want to
cover a couple other things. So I threw up a
map year of the population change through domestic migration. Okay,
this is just within the country, of course, and most
recently South Carolina, Idaho, North Carolina have seen you know,
just the most growth, okay, and those have been really
popular state and then the expensive left wing liberal places
largely I'm not really including Alaska in there, but New York, Hawaii,
California have seen outflows, and so you know, look at California,
lots of outflows of good people. That's unfortunate. Of course,
this isn't as recent as the COVID era. If this
were a couple of years older, you'd see Florida being
the star state and maybe Texas being number two. So
it's just kind of interesting. But here's some information on
the size of the housing shortage and how people differ
on this. And see that vacancy rates of for sale
properties and for rent properties are historically low. There are
not many vacant houses. And then here this is the
rental shortfall. So the housing shortage consists of two components,
rentals and for sale properties that people can buy. Okay,
there's two components to it. And probably not a huge
surprise here in terms of many of these areas where
you see the shortage as being the most acute in
the darker red versus the green where there's really no shortage. Okay,
And it's interesting that you would have seen in California
there being huge shortages before in these high priced areas,
but that's just not the case anymore. The equation is
really starting to flip and you see the desirable right
leaning markets mostly with bigger shortages. So that's interesting. Now
when you look at for sale units, okay, that's a
little different, it paints a different picture. But here's how
the shortfall looks there in terms of what's actually available
for people to buy.
Speaker 3: Pretty shocking, yeah, pretty shocking.
Speaker 4: I mean, that's like got to be the biggest shortage
since like after World War Two in the fifties and sixties.
Speaker 3: Jason and I.
Speaker 1: Would agree, yeah, and that led to a baby boom
and a booming economy for many, many years. So it's
it's quite interesting, you know. You you know, every everything
that we deal with has two major value drivers in
my opinion, scarcity and utility. How scarce is it, how
hard is it to make new supply of the item
the widget, and how useful is it? And housing scores
at the top in both of those categories. It's super
useful and it's very hard to create new supply. So
it's it's it's similar historical proven asset class in the
entire world. We my company, Empowered Investor, helps people buy
properties nationwide. We've got some great free software people can
get to analyze deals. It's called property tracker. Just got
a propertytracker dot com. That and you know, just a
bunch of resources for people carry you're super familiar with.
Speaker 4: All of that anyway, Oh yeah, very and it really
gives you a whole different perspective.
Speaker 3: You know.
Speaker 4: Another shortage we have critical minerals silver, and that market's
been bouncing all over the planet.
Speaker 3: Here.
Speaker 4: Is there a parallel to a shortage in housing and
a shortage of critical minerals like silver?
Speaker 1: And you know, I can't say that there is, but boy,
I have been watching the silver market. I mean I
came out believe the meteoric rise and then it gave
back a lot of that. I don't know what it's
done the last week or so, but you know, I
couldn't believe the correction.
Speaker 3: So you know, I still in the eighties. Yeah, still
in the eighties.
Speaker 1: That's that's pretty good. You know. I started buying it
at like sixteen dollars I think, or no, eight dollars maybe,
I don't know, I can't remember. It was so many
years ago. And you know, I'm into everything. I've got
the crypto stuff, I've got the medals and you know,
but real estate is really my favorite thing. Income producer
of crypto not doing so good and surprisingly, you know,
definitely not correlated with the fear trade of gold and silver, right,
which is interesting because a lot of people thought that
would be the case. You know, they'd run to bitcoin,
that would be the flight to safety. They'd run to gold,
that would be the flight to safety. But it's just
not playing out that way. It's playing out more like
a tech stock, I guess.
Speaker 4: Because it never goes according to what expectations are. The
market always stock market, investment paper markets always conspire to
frustrate the majority of investors and lose money, right, And
that's the way it works.
Speaker 3: And these are on the long come.
Speaker 1: Well, you know, as I always say, Wall Street is
the modern version of organized crime. They do a great
separating middle class from their money, for sure.
Speaker 3: So true, they're really great at that.
Speaker 4: And yeah, so real estate the formula still works, the
heartman formulas still can make you money in the long run.
Speaker 1: Absolutely, you know, it's a The thing about income property
carry is it's unlike every other asset class because it's
multi dimensional. With precious metals, for example, the whole strategy
is bilow sell high.
Speaker 3: That's it.
Speaker 1: With crypto, Bilo sell high. Non dividend paying stocks, Bilo
sell high, that's it. Okay, dividend paying stocks, yeah, I
get some dividends in between. But with income property you
make your return on at least six ways. I mean,
think about it. You've got income, you've got depreciation, tax benefits,
you've got appreciation, you've got leverage, you've got mortgage paydown
by the tenant, and then you've got my trademark strategy
inflation induced debt destruction. All of those things are creating
wealth for people with income property. You know, you can
have a flat market, you can have a declining market
in price and still make money because of the multi
dimensional nature. You're not just dependent on one or two
sources to get return on investment. You've got six sources.
At least some would argue there's more than six, but
six primary sources.
Speaker 4: Amazing, amazing. And hey, maybe you got an extra room.
You can't afford to sell your house, so you airbnb
it or rented out to a border, or you have
some extra property in the back and you drop a
portable cabana type unit that becomes an income property.
Speaker 3: You got.
Speaker 4: Optionality is the point in many different properties, and you know,
depending on where you are, class of property and all that. Jason,
where do we find you these days? Where's the best link?
Speaker 1: Yeah, my main website Jason Hartman dot com. Just my
name Jason Hartman dot com. You can find my podcast
on any podcast platform. Just type Jason Hartman. My YouTube
channel type Jason Hartman Empowered Investor. You'll find me, and
we're here to help people build wealth through income property.
We've done it for many, many thousands of people for
the last twenty two years, and we can help you
do it too.
Speaker 4: I met a lot of those people and mainly only
good things to say. You know, everybody's going to have
some loser investments in the portfolio. But if you stick
with it, stick with the formula, it's proven. I know
it works. It's worked for me in the past. Some
of my biggest scores have been in real estate and
scores that I know even intended to make. But like
you said, inflation induced, the debt destruction, rising markets, demographic shifts,
all of those things, real estate can really help you
take advantage of. Hey, you got a question comment for Jason,
Shoot me an email klat Kerry Lutz dot com. We
answer all questions, post a comment on the YouTube channel,
and Jason, thanks for coming on. We'll talk to you
real soon.
Speaker 1: All right, my pleasure, happy investing to you and your audience.
Speaker 2: Thanks for listening to Carrie Letz's Financial Survival Network, your
solution to today's trying times. For the latest, go to
Financial Survivalnetwork dot com. Financial Survival Network now more than ever,