Distressed Sales Jump 50%

0:00This episode is brought to you by Indeed. Stop waiting around for the perfect candidate. Instead, use Indeed Sponsored Jobs to find the right people with the right skills fast. It's a simple way to make sure your listing is the first candidate seat. According to Indeed Data, sponsor jobs have four times more applicants than non-sponsored jobs. So go build your dream team today with Indeed. Get a $75 sponsor job credit at Indeed.com slash podcast, Terms and Conditions Apply. All righty folks, this is your public service announcement of the day. The tumors and the crash bros are going to be saying things like distressed sales are up 50%. Now again, every time we hear a percentage, you know better than that. You need to understand the law of small numbers. Well folks, we just got existing home sales for the month and yes, it is factually true to say distressed sales are up 50%.

1:01They went from 2% to 3% of the market. More importantly, they are the same as they were last year, no growth. They're up 1% from last month to a total of 3%. So again, distressed sales will be up 50%. So be careful out there. The tumors are going to use this and use it a lot. But let's talk about the rest of the existing home sales report because I think there is a lot in there that they will frankly ignore because it doesn't meet their talk track. First and foremost, existing home sales was up 1.7%. There was a lot of fear. In fact, the analysts had thought we were going to continue the downtrend from January, they expected it to fall to 3.89. It was actually up to 4.09 or 1.7%.

2:04That is a month-on-month number. Now in fairness, that is still down 1.4% from last year. So again, we are still stuck in the mud. Again, my call that August was the bottom was clearly wrong. We may be putting in the bottom right now. We will know a lot more in March if we continue our sales growth from here. Next up, inventory. Active listings as reported by the National Association of Realtors is up 2.4%. That is actually not a lot. And what do I mean by that? Well, as Beth Traverso has trained us, there are parts of the country that have started their spring-selling season already. And to not see a bigger jump in active inventory is maybe a little disappointing. For those of you expecting that Q1 home crash, I'm sorry to tell you, it's still positive.

3:08Up 0.3%. Again, we have been calling flat for years, and frankly, seeing no reason to change our call of flat. Affordability, this is an important number. And again, this will not meet the doomer's talk track. Affordability is better for the 8th month in a row. Folks, whether you like it or not, wages are going faster than home prices. Just think about this. Last month, home prices were up 0.3%. Wages were up 4.2%. This trend has been going on for 8 months. Unfortunately, it is slow. It is painful. It will take years and years to get back to normal. Never forget the period that we've talked a lot about from 1978 to 1994. That's 16-year period. That was a slow slog to get back to normal.

4:12More than a decade. Again, the doomers have PTSD with 2006. They've not bothered to go back and look at real estate in the 70s and 80s. That was a tail-tale sign of their error and the fact that they have PTSD. I think the most interesting thing is the National Association of Realtors has actually broken down where has affordability gotten better the most. Let's start with the Northeast. It actually came 4th place, 4th out of 4th. It is only more affordable by 10%. Next up, the Midwest. Only more affordable by 11.7%. These are year-on-year numbers. The South, better by 14.1% and the winner. For the most affordability improvement, year-on-year is the West. The West is better by 17%. What other data was encouraging in the existing home sales first-time home buyers?

5:16Shout out first-time home buyers. You made up 34% of the transactions in February. That is up from 31. Much better than 31. But not quite back to the 40-42 that we would like to see in a normal market. We will take any improvement in first-time home buyers. Next up, investors. Investors only made up 16%. Interesting note about investors is it also includes second homes. I don't know about you, but a lot of second homes are an investment. Again, I thought that was interesting. And then again, as I said, distressed sales up 50% from 2% to 3%. So again, very interesting data, existing home sales. Frankly, net net better than expected was this report. Next up, Bank of America CEO, Brian Mordahan, is out with an interesting message

6:17basically saying they've adopted AI in their coding ranks. And according to him, AI has saved them 2000 headcount. Now, what he's saying there is they didn't fire 2000. They are just getting more productive. They are doing the work, more work with the same amount of people. However, if you flip that coin over and you go into a recession, that's a lot of people you can lay off. So again, interesting message. Shout out Gavin Newsom, Gavin Newsom, always winning for California. Folks, I don't know if you heard this, but the other day Yamaha Motor USA announced after 50 years that they are leaving California and moving to Georgia. Gavin Newsom has made running a business in California impractical, impossible, and just too hard. Gavin Newsom, congratulations, you are winning again.

7:18Yes, if you haven't figured out yet, I hate Gavin Newsom. One politician I will say I hate. He destroyed my lovely state of California. Check out that oil chart. I don't know if you saw the oil chart yesterday in open, I think at 94, when all the way to 117 and finished it up down to 85. It's now back to 94 last time I checked. Folks, that chart that one day is more volatility than we see in years. There were clearly people caught short, then more people went short. It was a wild day, wild day. Shout out Mike Simonson, he shared a report that I've never heard of before the exact this mortgage intent index. Basically, this is an index of credit polls and the like. Basically saying it's at the highest level in two years at 159.1. Clearly, on the chart, it shows that people are attracted to lower interest rates. If you've been watching this channel for any like the time,

8:21you know that with certainty because we talk about it all the time. What happens when rates hit 5, 9, 9? Mike Simonson out with his weekly housing update. Again, these are week on week numbers. New listings down. That's crazy. It's the spring selling season and new listings are down. 2000, only 62K. Basically, when rates fall, demand picks up first. This is something Beth Traverso, Adrian Hernandez, all the real estate agents and I talk about on this channel. When rates fall, demand changes in an instant, but supply takes weeks if not months. Active inventory now on a year on your basis is up only 6.9%. Folks, just a few months ago, it was up 30%. There are actually people thinking that active inventory will go negative, negative year on year in March or April, wild.

9:24Well, the sharp drop in oil yesterday can be specifically pointed at President Trump. President Trump had several things to say that likely sent oil off a cliff. The Iran war is, quote, unquote, very complete. Next, the war could be over soon. Again, these are the messages that the market was hungry for. Obviously, they want to see the straight-of-her-moo is open for business. That will take off oil off the boil. Oil storage estimates India would run dry in a month, Thailand in Vietnam, two months, and their estimated China could run dry in three months. This is a worldwide problem. Lots of pressure building to get that straight-of-her-moo's open-and-function. Lance Lambert did an active inventory by state, as opposed to maybe the one Mike did earlier for the country.

10:27Lance Lambert said, Washington State has the most active inventory jump at 27%. Can you say maybe tech layoffs or fears in the Seattle Metro Area King County? How about Maine? Maine's not a state that I think about for a lot of inventory, but that is up 20% year on year. And then finally, North Carolina came in third place. It also up 20%. What about the states with less inventory? Well, we've got a New York active inventory actually down 1% year on year. Florida, how about Florida down 4% year on year? Maybe the worst is over for Florida. And then finally, Alaska. Maine would not have guessed Alaska. Alaska wins with down 9% year on year. Let's welcome Kimberly to school. We had a new member join yesterday. Kimberly, thank you for joining.

11:28Make sure you introduce yourself to our amazing community. And if you are a real estate agent or want to work with real investor-friendly agents, great news on Tuesdays from 1 to 2 o'clock Pacific, we have a real estate agent mastermind. So again, folks, we have an event every single day in school that you could join, be a part of, ask questions, education, active forums, all of that stuff. And the last thing I got for you, Lance Lambert on builder incentives. Now, these two builders he has is Lanar in Polte. Basically, are they getting more or less aggressive? Well, in Q4, Lanar incentives were 10%. Polte, 7.2. Okay, that's our baseline. Where did they go in 2025? Well, Lanar exploded to 14%. If I was a doomer, I might say up 40%. You could mathematically say that Lanar's incentives are up 40% year on year.

12:35Crazy. And then we got Polte went from 7.2 to 9.9%. That's actually pretty close to 40% increase as well. So again, folks, always be careful of percentages, especially on small numbers. Doomers will use it to create fear, uncertainty, and doubt. But we will keep bringing you the truth behind the numbers. Don't forget to join our school community. It is right there on the screen. 67 pennies a day. Get around nearly 700 wealth builders. It is the best community out there if you want to build wealth. Again, if you want to build wealth, you got to be around other people. Lots of us, myself included. Tried to do it alone. And it is miserable alone. The first five years suck. So get around other people building wealth. Share your stories. Hear their stories. And just know you are not alone. If you are early in this journey, join the community. You will find like-minded individuals on the same path.

13:36And of course, never forget to give steadily a chance. They saved us 20 grand. A little bit over 20 grand in 2025. And I will be forever thankful. That is like 2 grand a month, folks. That is like 2,000 bucks a month. Just right to the bottom line. Love that. Love that. Again, didn't always help, but helped enough. Gives steadily a chance. Link in the description. Take care, everyone. Have a wonderful day. Later.