Summary:

• (00:00 – 01:32) The Fed is losing control over interest rates as they rise above 7%, driven more by the bond market and investor sentiment than by the Fed’s policies. Tariffs and geopolitical uncertainty add to this instability.

• (01:32 – 05:11) Mortgage and commercial real estate rates are tied to the 10-year treasury, which is rising despite the Fed’s attempts to cut rates. This has made borrowing costlier and complicated real estate deals.

• (05:11 – 10:06) A credit downgrade and expectations of inflation are causing bond investors to demand higher yields. This forces mortgage rates higher and makes housing and real estate investments more challenging.

• (10:06 – 12:46) Unemployment is rising in certain states, and there’s a growing fear of stagflation (high unemployment, low growth, high inflation). AI and tech changes are also displacing traditional jobs.

• (14:25 – 18:34) Residential real estate is slowing as high rates and prices hit affordability. Sellers who don’t have to sell are holding back, but some forced sales are pushing prices down in certain areas.

• (20:52 – 26:34) Despite high mortgage rates, homeowners with low locked-in rates (under 5%) are not selling. Limited new construction is likely to create a rental shortage in coming years, pushing rents up.

• (29:28 – 34:16) Some markets, like Florida, are seeing higher condo inventory due to new HOA reserve requirements, impacting single-family home prices too. In other markets, there’s a mix of deflation and inflationary pressures.

• (34:16 – 36:34) In commercial real estate, higher rates, expenses, and vacancies have created buying opportunities below replacement cost. Investors are urged to focus on cash flow and not speculate on appreciation.

• (36:34 – 38:37) The main takeaway: the Fed may have lost control of interest rates, with the bond market driving the direction of borrowing costs and potentially causing real estate prices to fall. However, there are still opportunities for smart investors focused on cash flow.

• (38:37 – end) The speakers invite listeners to join a live discussion with Robert Kiyosaki and Tarl at Limitless Expo to explore these issues further and discuss how to navigate the market uncertainty.

Transcript: 

The Fed is losing control of interest rates as we see rates rise to over 7% this week. Yeah, I know. Trump’s pissed, right? Yeah. It’s not It’s not a PAL issue, though. It’s not a PAL issue. I agree. I agree. I mean, they’re laying these tariffs um on us, I guess. I guess we got a 90-day pause on most of them.
But um you know, the Fed’s job, of course, one of their jobs is to they have a dual mandate. One is to obviously have maintain pricing, right? It’s pretty hard to maintain pricing when the president’s issuing tariffs, right? When you say maintain pricing, you mean, you know, regulate inflation. Yeah. Yeah. Yeah. Essentially. Yes.
Right. And so they have that dual mandate, right? One is unemployment and the other is inflation basically. But it’s really pricing. So I think that’s um it’s going to be interesting. And I I actually don’t think that we’ve really seen what we’re going to see from these tariffs. Well, I think what’s interesting is that, you know, typically the bond market uh reflects the Fed.
And so, you know, we always have relied on the Fed to set rates even though they’re not really setting the rates. The bond market is, but it follows, you know, the how the economy is doing and everything else. Well, now you know we have the Fed that has paused anything with rates, but rates are continuing to go up and that’s because of the bond market and how investors are feeling about investing in US bonds. Yeah.
And and real estate from in my world is priced by the 10-year, not you know, the Fed fund rate is, you know, that’s a lot of people focus on that and I I I you know, I guess they’re they’re looking at two to three potential cuts, but the tenure’s up. So, as the Fed funds rate has gone down, the tenure’s gone up. So, you know, that just makes a lot of the commercial real estate at least harder.
And well, it makes everything mortgage rates are up. Yeah. It makes mortgage rates go up, which inevitably makes it harder, you know, if you’re selling your house or if you’re trying to buy a house, um whether it’s an investment or not. But I think that you know a lot of people in order to understand this you have to understand like what treasury yields are and how this kind of all works.
So basically and you deal with this a lot when raising money from investors. So a treasury bond is like the safest investment you can make right because it’s backed by the government the government the US government. So, you know, whatever that is set at, you have to then set any money you raise or any any um your mortgage back securities, different things like that higher because there’s more risk.
So, that’s why interest rates have to be up because if investors are demanding that these security bonds are or treasury bonds are at a higher rate, then everything has to be higher than that. Right. Right. Um there there’s a a bunch of things. there’s crossurrens going on all over the place, right? Um, we’ve talked about this on the channel, but I think it’s important to mention that if if if you’re a country that’s doing business with the United States.
Um, let’s just talk about China. All right, let’s say that we’re buying stuff from you and and I pay you in US dollars and they’re frustrated with holding US dollars. In fact, the the US dollar just got downgraded, right, from AAA to double A. Yeah, yeah, we’ll chat about that. Yeah. So, there’s that. So, you do have that as well.
Um, in addition to that, you you have this I think that the tariff um the potential inflationary issues with regard to the tariff. So, you have all of these things going on at once. And the Fed’s in a in a in an interesting position. And and um I just got done speaking at the rebel capitalist two days ago at George Gammon’s event down in Orlando and it was really interesting because we had a bunch of economists there some really really smart people that studied the macro macro macro including George if you guys don’t
follow George you should um and what everyone’s consensus was it’s this is this is very interesting is that interest rates they think they’re going to have to go back down to zero very interesting But does it matter if it goes back to zero if the bond I mean the Fed That’s what I’m saying. The Fed’s losing control.
So they they could control rates but they can’t if the bond market’s uncertain. That’s right. Because they don’t have any influence over that. Right. None. And and you have to understand why the bond market is uncertain. And part of that is because you know we were downgraded on our credit by Moody’s. Um and that’s one of the things.
And the other thing is that these people that are investing in the bond market are expecting inflation. So, you know, you have to give them more interest for that, right? Like if like if you’re paying, you know, 3%, well, they’re looking at inflation like if I invest my money and I get a 3% return, I’m not making any money and in fact could be losing money.
Uh so I want, you know, four and a half% or 5%. And then people investing in um the uh mortgages have to say okay well now I want more than 5% because I can get 5% over here so I want you know 6 and a half%. And then that’s why you have these interest rate increases and the Fed there’s nothing that they can do and they’re basically losing this tool in their tool belt if people don’t want to invest in the bond market.
Well, some people are saying right now that the the Fed actually might not be in control of this at all, you know, the 10-year, right? And the bond market clearly, we know they’re not, right? So, so yes, they do have the federal funds rate um at their uh they can control that and they’re expecting to have uh I think two more cuts this year. We’ll see.
But um the one thing is for sure um you know Trump’s tantrum what they call it Trump’s tariff tantrums I think um u you know there’s no love loss between him and Powell that’s for sure there’s not and and and the tariffs are creating uncertainty and that also is affecting the bond market because all the you know we get a lot of foreign investment into the bond market it’s not just US investment and if people don’t understand what’s going to happen with inflation and they don’t understand what’s going to happen with the tariffs
and you know it just creates less demand for the bond market which is why gold prices and crypto prices are shooting through the roof because those people that you know normally would be investing in more bonds and and things like that are turning to something more national. That’s why I went earlier uh to the international thing because I I you know as we pay people and they’re holding US treasuries because that’s what they’re holding.
I mean people say they’re US dollars but they’re really US treasuries. Um and um if our dollar is becoming weak, it gets downgraded and also they see inflation coming. Um there there’s a there’s an issue around um a safe haven, you know, is the dollar a safe haven? And that that’s actually I think what we witnessed.
We just got back from um we were in Paris, we were in London, we were in um Italy and um you know the a $100 a $100 bill uh gets you a lot less than it did you know just a year ago um in all of those places. Um and and so you know let’s don’t forget the the other side of the of the issue. Um, you know, a lot of times if if if you don’t travel abroad, you you’re not seeing the this effect.
Um, and so you have all of these all these crossurrens happening at the exact same time. And and and I I think u I think Pal’s going to, you know, he’s going to step down in May, next May. So, he’s in place for another year and Trump’s not going to be able to touch him regardless of, you know, the you guys probably know the Federal Reserve is not have anything to do with the US government.
Um, it’s a private corporation. Uh, some people would call it a banking cartel, but the fact is is Trump has zero influence over it. Now, he is going to appoint the next I was going to say, but he does get to appoint the next, and that’s kind of where I’m heading. But he appointed Powell, correct? So, you know, you don’t you never know what you’re going to get.
You know, after somebody gets the job, they kind of could do what they want. So, right. Yeah. It’s a hell of a point, but I will tell you, so so Trump gets to pick the next person who’s going to be in there next summer. So, it’s going to be really an interesting year because the the the tariffs um they’re all going to be kind of exposed by that point, right? We’re going to kind of know.
Yeah. But also, if you think about it, okay, say the new um the new chairman, they lower rates, right? I know that they can’t just independently do that, but let’s just say that happens. If that sparks more inflation, wouldn’t it then potentially, you know, people that wanted to invest in the bond market want even a higher return? That’s my point.
Yes. Right. Yeah. Yeah. And and then, you know, let’s don’t forget that the other piece of the mandate for the Fed is unemployment. Now, while unemployment is reportedly, I guess in April was 4.2%. Guess what it is in DC. Guess what it is in California. Guess what it is in Illinois. Guess what it is in in Michigan? In the mid5s. Yeah.
So in DC it’s 5.6. Now that’s that’s probably doed. You know that people probably got doed there. But um you start to look at California, Michigan, Illinois, and some of these other states. Um you know they’re in the fives. And so when I’m starting to hear of people losing like I’m starting to know people that are losing their jobs, you know, I think it’s more unemployment is coming for sure. Yeah.
We we talk a lot about this guys, you know, in the middle of all of this. Um, I don’t want to go too far down this rabbit hole, but if you guys haven’t really jumped onto this chat, GPT AI train that a lot of people are doing right now, um, you take a look at bookw writers, copywriters, anything that’s, um, you know, can be processed, accounting, attorneys, attorneys, right? Like, uh, like I got this, I showed Denil this over the weekend.
I got, uh, I’m working on something. I got this term sheet. It’s like 12 pages. All legal, all attorney, all you know, oh my gosh, like if then, thereofs, all that kind of crap, you know, like the really hard stuff to read. I don’t know about you guys, but I struggle through that stuff. Sometimes I have to read it one or two or three times.
So, what did I do? I sent the whole thing to Chat GPT and I said, “What would you do? How would you renegotiate this 12 uh page uh contract?” And he gave me like a whole list of stuff to do. Um, the point is, um, I’m, you know, I’m old. I’m learning this stuff for the first time. There are people that are rolling on this stuff right now and building huge, huge platforms with this.
Uh, the the the truth is and where this is all heading is there are going to be a fair amount of advertising, marketing, attorney, accounting, all this stuff. every job other than 30. It’s really I’m telling you guys like this is something this is has obviously nothing to do with this administration or the Fed or anything like that.
But um I was talking to George Gavin. He thinks as a result of all of this stuff together that we could get up to 10% unemployment. Now for those of you who think I’m out of my mind, I was in the middle of this in 2008. Some of you might remember we were at 10% unemployment. So it can happen and and so this is another piece for the Fed.
Well, and we very well could have stagflation. Like I think stagflation is a very real uh thing that could happen. I mean you would have drop in wages, high unemployment and inflation. And in in 2008 we didn’t really have inflation. So the three things inflation you you nailed them. They’re they’re high unemployment.
they’re uh slow economic growth and high inflation. Those are the three things. It’s very a lot of people are calling for that. I I think the last time we really saw that was in the 70s. Um and um I can’t remember the the Fed chair at the time, but I think he started jacking rates up. Um was it which one? Paul Vulker. Yeah.
Yeah. Um and um he he I I remember coming out of high school um my uh the and I got my first car. I remember just like it was yesterday. It was a Nissan Maxima. That was my car that I it was a used Nissan Maxima, but my interest rate was 15%. Uh for that car. Um and I remember and and I’ll tell you at the time, of course, you know, as a kid, you you don’t know any better, right? But um you know who knows who knows the levers.
I I will tell you something really really interesting. I did a comparison at the George Gamut event. What was the difference between 2008 and 2025 let’s say because a lot of people are are comparing that. I think a lot of times the reason they compare that is because they just want to go back to the last you know wild time and the great financial crisis was tough.
Here’s the biggest difference. They did a lot of work on this before I did my presentation. We had um we had a lot of people building homes during that period of time. And so we were over supplied on the single family side. And when the bubble popped in 2007208 there were 4 million homes on the MLS.
Okay, that’s a significant difference. Today, a lot of people have a lot of trapped equity and I think we just crossed over a million. So, we’re not even close on the supply side. So, uh for a lot of you guys are thinking, “Oh my gosh, we’re going to have this real estate crash,” which is of course the whole point of this channel.
Um I could not uh I I don’t I don’t agree with that at all. Well, let’s chat about what it does mean for real estate, though, because there is definitely going to be repercussions if rates stay high and especially if rates continue to go higher. Um, because one thing that it does is it crushes buyers affordability.
Like, they just can’t afford to buy. And we’re starting to see that now. You know, we’re really seeing home sales really almost come to a standstill. You know, I mean, things are selling still, but it’s slowed down. Yeah. you know, well, the prices are high and interest rates are going up. Exactly. And people can’t afford it.
We cracked 7%. Right. Yeah. But but but the thing is though is that I’m seeing a lot of D-listings, right? So the people that are selling have to sell, but you’re not it’s not like 2008 where people are giving their homes away because they don’t have to sell. They’re in like a, you know, 3% interest rate or something.
So they just don’t need to sell their home. So, it’s like they’re not just going to give it away just so they can buy a different home, right? So, you’re not seeing that, but you are going to see prices drop for people that have to sell their home, I believe. Oh, yeah. Yeah. I I I agree. I But I will tell you, uh it’s a very different scenario that because I went through this.
If if I’m sitting on a lot of equity, which is exactly uh the majority of of the Americans are sitting on a tremendous amount of equity, don’t forget the other side of the equation. If prices are high um and they’ve gone up a lot, that means that people are sitting on a fair amount of equity.
That’s the biggest one of the biggest differences of 2008. So um you’re right. Um they have a lot of wiggle room, which is really good. That also means that all it’s going to do is really eat in to the equity that they’ve already got if they’re if they sell, right? Things are going to be on the market longer. Uh days on market, we’re already seeing that.
I looked um I think we’re at like eight months on the average. Uh days on market, something like that. Well, days market in Phoenix is like 60 some days. It depends. Yeah, it does depend. But if you if you take a look at I was just in Florida. Florida’s in trouble. Yeah, Florida is the slowest market, I think. Well, they had there’s more dynamics though going into that than just the market itself.
Like they have a lot of condos for sale because they pass some kind of new law that condos have to have all these reserves and so the HOA cost and also just different assessments have been hitting a lot of condo owners. So, a lot of condos are listed and that’s going to even affect single family because if condo prices are going down, they, you know, single family prices kind of move not along with them but a little bit, you know. agree.
And so you’re starting to have this mass exodus on Florida. Well, also don’t let’s don’t forget part of a part of a of um a deflationary time, which is, you know, really what you can categorize Florida as going through. Um u on the other side of that, it it grew and appreciated much much faster than most of the markets.
So like if you’re comparing this to let’s say Columbus, Ohio or Cleveland or whatever where Denal’s from, you never had that run up and you’re not going to have that that retraction. So you a lot of people I think this is a really interesting point too. A lot of people think you either have deflation or inflation. You you actually have both.
The question is which one is actually pulling the hardest. So you can have deflation. Just think of an iPhone or or a TV set or whatever anything that you buy a car. Those are deflationary. Um, and so you can have lots of different things happening at the same time. And and and so the the the real issue is which one’s pulling the hardest.
And I think with with these tariffs, we might be able this this might be a very interesting time where we might see to your point, Denal, high inflation and and um and high unemployment. And if we get into this piece, then we could have uh we could be sitting in a pretty severe stagnation time frame next week. the the Fed is going to be in a in a really really really tough spot.
I I think they’re going to have to massively cut rates. But I don’t think but I but it’s not going to matter if the bond market doesn’t follow through. Then it’s not going to matter if they cut rates. I but I I I think though if um if they’re going to have to be in this position because uh and the problem with that is going to create another bubble, you know, but you know, if you’re sitting in in um uh if you personally are sitting and you have a 3% mortgage rate on something and and the rates and the rates go down, um then uh
you’re now going to be in a position to either sell or move. But why would rates go down? because the bond market is the one running this. If the Feds cut and the bond market doesn’t feel secure, I mean, it’s not going to matter if they cut. Yeah. I It’s a fair point. But we don’t know what the bond market’s going to be in a year.
We don’t And we don’t know, you know, what the Fed’s going to do. I mean, these tariffs really are creating a lot of unknown situations. But right now, investors are not wanting to invest in the bond market like they have traditionally, right? And that’s a that’s a massive problem. But but you do have to look at the buyer affordability because you know rates are 50% higher than they were over 50% higher than they were back in like 2021.
So people’s payment has literally doubled and so there there is a cap on what people are going to pay to buy a house you know based on their rates. Like you know we saw a dip in rates about a month and a half ago and they dropped to 6.25. a lot of houses did sell that weekend, you know, but now that they’re back up over seven, you know, people just can’t afford it.
And, you know, that turns more people to rentals, but it also makes people that have to sell lower their prices that if you have to sell, you have to sell. So, whether you’re going through a divorce or you got a new job and you have to move or whatever your situation is, you know, people, we’re seeing lowering of prices due to that.
We’re not seeing anything dramatic, but you have to meet people where they’re at at these 7% rates, but I do like the phrase, the cure for high prices is high prices. I mean, that’s a truth. Like, you know, they can only run so much. Um, and then they stabilize and then now we’re starting to see days on market.
The the reality is is um if if we’re looking at this from a single family standpoint, I personally don’t see any real relief from the pricing. Maybe we start to see a slow um on the growth of the uh you know on on how fast it’s it’s growing. But if you take a look at Zillow or Red Fin, they’re all saying somewhere between two to three to 4%.
I don’t know if that’s going to happen or not, but that’s what they’re saying. But they’ve been saying that year over year over year. Um on the um on the affordability side, which we touched on a minute ago, I think that’s one of the bigger issues because what you’re what you have is you have these uh now 7% interest rates with these prices that aren’t really going anywhere.
Um and um and you’ve got people now that are defaulting into rentals and and uh you know, right now we’re 65% home ownership rate. um we were as high as 69% uh you know back in the like 2008 um and and I think this is going to regress you know we I’ve been talking on this channel about renter nation reenter nation um there’s a lot of things that have to change for uh for people to be able to move from a rental to a home and the the delta between a um a mortgage payment plus all the cost to to maintain a home versus rent is significant. Uh, it’s not even close.
Well, and you have to look at 91% of homeowners have a mortgage rate under 5%. I mean, that’s huge. 91% of people. So, those people Yeah, those people are going to hold the line unless they have to sell and they’re not going to be selling because they can’t afford their payment in almost every circumstance because those payments are not a lot.
You know, they’re very, very low housing payments. So, more often than not, it’s going to be a job transfer or something like that. But you’re also going you’re not having any additional building right now. You know, if anything’s being built, it’s being finished. And that is going to create, you know, for renters, you know, more less supply and more demand because us landlords the last couple years have been seeing like an over supply of rentals.
And we’re still dealing with that right now. I’m dealing with that right now as I rent out my place. But now that nothing else is coming to market and people are still moving to an area, that’s going to start to saturate. And so you’re going to start to start to see more of a demand on rentals and higher uh rental prices in the next few years. Yeah.
And if you guys are as confused as we are cuz we do try to prepare for this stuff, but man, stuff is coming at us. Um join us on Thursday. It’s free. This is free, free, free, free, free. We got Kiasaki himself and Robert. Um, Robert and Taro. Tar, if you guys don’t know Taro, he’s my partner in Limitless.
Um, he has done I think in like 900 homes or something single family. He’s like he’s crushing it on the single family side. Right now he lives in Austin, but he used to live up in Seattle and myself and we are going to try to figure this out. U, so I just saw Robert and I said, let’s let’s uh let’s talk about the the dollar reset. you know, where are we heading and what’s the Fed’s next move.
Um and um so that is free, guys. 700 p.m. Eastern and 400 pm Pacific. Um please join us for that. Um and of course the I was calculating the 90day mark on this, you know, I guess this pause for uh the tariff pause that that’s going to put us right before Limitless, right? It’s going to be really, really, really interesting.
So, one of the things that Tarl and I are doing is we’re putting together a manufacturing panel, right? And so far, we got some really, really exciting companies that are doing business outside of the US and have a lot of their stuff done um uh in China, in Mexico, in Europe, and uh different parts of Asia. So, um anyway, that’s going to be at Limitless, too.
Don’t don’t Jerry, you want to put that up real quick? Um, for those of you guys, there is a price um increase at the end of this month. So, uh, make sure you go there, check it out. I can’t remember off the top of my head what it is, but I do know that it goes up at the end of the month.
So, uh, you’re going to want to, if you’re going to want to join us and you’re confused as as I am, um, we are going to try to figure this out. We’re going to have panels on all this stuff. This year, we have Jim Jim records, too, by the way. So the other thing with investors right now is it’s getting harder to make cash flow work. So that will become easier as prices come down and rental prices come up.
Well, when is that? Well, it depends. I mean, prices have to come down and when rates are this high, prices have to come down if people want to sell. We’re already starting to see that. And that’s what happened. That’s what happened in the 70s when you had stagflation. You had prices of homes go down and rental prices go up.
I I well I I guess there could be a case for that over the long term, but uh I guess this year I don’t see them coming down. No, not necessarily this year. No. No. I I mean maybe next year. I mean on my side of the equation on the multifamily prices are down as a result of the cap rates have gone up, interest rates have gone up, expenses have gone up, and vacancies gone up.
So all of those things have have really adjusted or jolted the commercial side of the market, the real estate market, which is where I play mostly. On the single family side, you know, to your point, you got 91% of America sitting what 5% or under. You do. Why would you Why would But you also have inventory, at least in the Phoenix area, is back over where it was in 2019.
We have increased inventory from 2019 when we had a pretty healthy market. So, it’s really switched to a buyer market right now and it’s continuing to become more of a buyer market as we head into summer. Yeah. Yeah. And I think that’s not necessarily bad. No, it’s not a bad thing and it doesn’t mean prices are crashing, but what it does mean is if rates stay this high and continue to go up, you’re going to have people that have to sell their house have to sell their house and if there’s not that many buyers, they have to lower their prices. And you’re
starting to see that. And so to your point, I don’t believe there’s going to be this massive amount of supply because people that don’t have to sell aren’t, but there’s enough people that have to sell that it’s going to influence. So that’s the piece that I don’t know about. Like uh who are those people? They’re people that are moving, getting a divorce.
They’re people that, you know, I mean, I guess if they’re in a position to, you know, they have to sell because they’ve expanded their family is going to be second homes are a big one right now. Airbnbs are a big one right now. So there’s all these people that are having to sell. There’s investors that were barely cash flowing and now they’re not.
So there’s enough people that it is hitting where we’re above 2019. There’s there’s a bit of turn in that arena. But but the the people that are sitting at 90 uh the 91% of the people that are sitting at 5% or under that don’t have any of those things going, which is the majority, they’re that’s a big decision. Yeah.
I don’t think that those people are going to sell, but I think there’s enough of the other people to affect pricing. Well, we’ll see. That’s that’s the piece. I don’t know. I I Well, we’re seeing it though. We are seeing it. If you you know, I’m on the MLS every day. I mean, you’re seeing prices dropping. You’re seeing things sit.
And now that we’re going to summer, which is Phoenix’s slow season, you’re going to see it even more. Now, I am seeing people pull off things off the market because I believe if they don’t have to sell, they’re not. But there’s a lot of people that have to sell and there’s not that many buyers and buyers are, you know, they’re looking at these 7% rates and they’re high.
You know, I just had one of my clients text me yesterday like I think rates just went up because they’re already looking at like how much they’re going to have to pay monthly. Well, I think you nailed it when you said there’s not that many buyers, right? That’s actually the real because they’re priced out. Yeah, there would be.
There’s a ton of people that want to buy, but when your housing payment from 2020 till now doubled, it’s very expensive and a lot of people just can’t afford it. But if you look at nationally, not Phoenix. Mhm. Um we’re still just what just barely over 1.1 or 1.2 million on the MLS. But that’s mainly from the norththeast is really contributing to that because they don’t have much supply at all.
But you know like Texas, Arizona, Florida, you know, different parts of the country are oversaturated. 60 days days on market to me that’s that’s not healthy. That’s a sellers market for me. If if 60 days on a market is a sellers market, but it’s went up. But you have to look at how much it’s every month it’s going up significantly.
So yes, right now it’s 60ome days, but I bet the end of But if you look May it’ll be more. If you look historically what they say, whoever they is, I always wonder that question. Um, they say that it’s 4 to 6 months MLS. That’s considered I guess neutral. So that would be um where uh something’s on the market 4 to 6 months and um that is considered it’s not necessarily a buyer market.
It’s not necessarily a sellers market. It’s just about right if you look at history. So I 60 days if that’s where we are today 60 days I still think it’s a little bit of a sellers market but there are definitely markets but by the way this is kind of new. So do you feel like it’s a seller market or do you look at data somehow to know it’s a seller market? Well you told me it was 60 days.
I’m I’m going to believe you and I’m going to go off of history that says it’s four to six. So um so that’s where I am. But but but also I I’ll give you one thing. Um we’re this is kind of new. So we’re just creeping. So days on market um is is kind of a new phenomena. I I’m with you. I don’t think there’s a lot of buyers.
And so the days on market is going to continue to go up here through this year. I do believe that. And so we could be sitting on a very very different scenario at the end of this year. So uh because stuff that’s not selling in 60 days still has the same issue. Not enough buyers. Um, so maybe that’s four months, maybe that’s six months down the road.
Um, some of those homes still potentially could be for sale, right? But I do think that just moving forward, it will be interesting to see what what it does. But as as investors, we don’t we shouldn’t freak out because prices go down because I think people freak out like, “Oh my god, I should probably sell my rental because prices are going down.
” you know, we’re looking at that cash flow and rents in these kind of times go up because there’s more renters and there’s more renters and people can’t afford to buy and so and they’re not building any new construction right now. So, the demand will be greater than the supply. So, you know, people try to time the market, right? They always try to time it.
Like they want to buy at the low point and sell at the high point, but realistically, you know, in these times with inflation, rents are going to go up. So, if you’re in this set mortgage, then you’re good. You know, you’ll be fine. You don’t need to freak out just because housing prices might drop. No, guys.
Like, and people freak out over that stuff. Yeah. I guess I I I mean, like, if if you’re in the business for cash flow, passive income, and long-term and and tax benefits, then why are you even looking at it? like um I I get the fact that you might want to take a look at it just from a comfort level, but you know, if if if you feel really good about the renter in there, um and where things are heading from a renter standpoint, then who cares? Who cares if your house goes down 100 grand? Seriously, that’s the way I feel.
I don’t care because rent’s not, you know, rents are um although right now rents are getting clobbered a little bit, which is why I’m going crazy buying. So, we’re very excited about the acquisition t time frame for apartments, but that that drops off a window here very soon by mid 26.
There’s almost there’s the supply just stops because when rates started going up in in late 2022 after inflation hit 9.1 in June of 22, um people started pulling back the new construction, new housing. So there’s not, it just uh didn’t come to a standstill, but in 22 things slowed down. In 23 they slowed down. In 24 they slowed down.
Um and uh people said, you know, I’m just going to wait and see where interest rates go for construction. Um and so Denil’s right about the construction. There’s not a lot of new construction happening. And so there’s a time frame right now, this little window we’re in where um and I I just don’t see a big adjustment on the single family housing side.
I do see days on the market. Maybe maybe the the the the buyers are um in in many many certainly they are. I definitely know they are in Florida. I was just in Orlando yesterday. Um and I’ll tell you um you know it’s a mess down there, right? There’s and there’s other markets that are being rocked, too. But but I still think this is a great little window even with the high rates.
Um because when do you want to buy? It depends on what side of the equation. If you’re going to if you’re going to buy something to move into it, um maybe you wait, but who knows where rates will be. Um if you buy something um to invest in, you got to make sure it cash flows, and that’s very very hard to find right now.
On my side, uh I’m finding massive disruption on the commercial like apartment side where occupancies are being challenged, vacancies are higher, uh expenses are higher, interest rates of course are higher. Um and um we’re we’re we’re we’ve been able to buy below replacement costs. So very very very different as a result of everything that got started in 23 22 um is now being leased up and and hitting the market right now from a renter standpoint.
So it’s a really good time for renters right now, but it won’t be in mark my words uh this time next year. Um you’re going to start to see massive stabilization and you’re going to start to see rent growth. Yeah. Yeah. And I think right now is a good time if you’re in a property you don’t want to be in and you want a 1031, now is a good time to do that because we don’t know, you know, you we could see a de a decrease in prices, which is not a big deal if you’re in something that you want and you’re getting cash flow and you’re renting it. It is a big deal if
you’re in something you don’t want because you might not be able to easily sell it in this kind of market. So, it’s kind of a good time if you’re trying to get out of something to get out of it before the market gets worse because I do think the market’s going to get more clogged than it is. And, you know, there’s a lot of talk about the price and I get that, but you have to look at the whole thing.
So, you have to look at the interest rate at the time, too. Um, and you have to look at the rent. So, if you’re buying these as investments, um the price is important, but it’s not necessarily the most important. So, if rates went down to five today, you guys would be wouldn’t care about the price is my point, right? Prices would probably go up, right? This is this is my point.
So, prices might come down a little bit. You might get a good deal, but it uh only is going to be meaningful if rates also come down, right? Um, and as of recently that has not been the case. Well, I think the big question is, has the Fed lost control of interest rates? Because if they have and if they do try to lower and they can’t because of the bond market, that’s going to be very interesting situation and it’s definitely going to affect housing prices.
Like if the Fed cannot get prices uh rates down, it’s got to affect prices of things. I agree. Yeah. I I I actually don’t think that they have much to do with it right now. It’s certainly it’s certainly looking that way. So if you look at the Fed funds rate has gone down, then why has the tenure gone up period, right? I mean just look at that.
During the same time frame from beginning of this year, the Fed funds rate has gone down the Fed and the tenure has gone up. Mhm. So there you go. Right. Right. It’s going to be interesting. You know, we have Well, the Fed what meets next month or this month? Yeah. Or June. Yeah. And uh you know, we have Trump’s tariff pause. So, we’ll see.
Trump’s going to have to take pal to some coffee or something. That goes. Um but there’s a lot of unknowns right now. There’s a lot of unknowns. Uh but not a bad time to buy to be honest. I still don’t think it’s a bad time to buy. I just bought something. It can be if it’s not cash flowing. It’s got to cash flow. has got to make sure it cash flows.
Don’t buy just to buy. Don’t buy based on on a capital gain. Please do not do that. Do not The goal is not to buy something and fund it. Well, and right now, if you’re betting on appreciation, that’s not a good bet. You know, I mean, eventually we’ll appreciate, but like how long could be a long time, right? Right.
And again, if you guys are as confused as I am, don’t miss the live stream that we have. It’s free this Thursday with uh Robert Kiyosaki and Tarl, my partner at Limitless. And of course, we’ll be at Limitless at the end of July. I know uh you a lot of you guys want to see meet Denal.
So, uh don’t forget she’ll be there uh we’re going to do a podcast live, a live podcast from Limitless um on uh August 1st. So, we hope to see you guys down there, too. It’s going to be in Dallas again. um 50 speakers, three stages, 2,000 people all trying to figure this stuff out. And let’s and let’s end on this. Jared said, “I think that is why the Fed isn’t lowering.