Foreign Buyers SURGE 44% in US Housing Market

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. Have you heard foreign buyers surge 44% that is the reason the housing market is unaffordable according to some doomers and crash bros. But folks, we are smarter than that. We look inside the data and we don't let scary percentages send us off the deep end. So what is the real, real behind these numbers? Where here it goes, folks?

1:01It is fair to say that year on year, foreign buyers did grow by 44%. But as always, you should ask yourself compared to what? The reality is even after this explosive growth, foreign buyers made up a total, a total of 78,000 transactions. Now folks, if you don't have any context for 78,000 transactions, let me just tell you, last year, existing home sales, new home sales, were 4.6 million. Even if you just take existing home sales, that is 4 million. So if you take the time to do some simple math and you take 4 million, or you take 78,000 and divide by 4 million, what do you find out? Well, roughly speaking, foreign buyers made up 1.9% of all existing home sales transactions,

2:051.9%. So these people that are out there trying to scare you and get you all excited because you're being outbid by these greedy foreign invaders. Don't believe it. It's not the hype. What is interesting, I thought, is that 47%, roughly half, simply pay cash. And that gets me thinking that a lot of these folks are frankly buying properties as a way to save their wealth. They're using it kind of as a savings account. They're taking their money out of their country and plopping it down somewhere in the United States. So again, foreign buyers only only made up 1.9% half of them paid cash for a total of 78,000 homes. What else did we learn about housing this weekend? Lots actually. First, U.S. rents fall 1.5% year on year.

3:11Why is that important? Well, again, folks, remember, inflation, the latest shelter reading had inflation for rent or owner's equivalent rent or shelter at 3.2%. 3.2% reality, negative 1.5. That is nearly a 5% swing, it's 4.8%. So what does that mean? Well, it means if we were using actuals for shelter or rent, there's a very good chance that inflation is below 1%. Fed has one. I don't know why the Fed doesn't take that and share that. But again, inflation, if we adjust correct, look at real world is now below 1% when rent is adjusted from positive 3.2 to negative 1.5%.

4:19And just so you know, it's not only negative year on year. Down from the peak, rent is down 5.9%. It is estimated that the peak was August of 2022. So we are down nearly 6% since 2022. Certainly not up 3.2% as reported in the Fed calculations. Other real estate data we learned, we got a great report from Lance Lambert at Rezzy Club talking about accidental landlords. Accidental landlords in a separate report was estimated to be have risen 2.3%. Now you might ask yourself, how do they calculate accidental landlords? That's a great question because I ask that myself. This is how they do it. They track all of the rental listings for single family homes. And they try to figure out which of those were previously listed and have no sales transaction.

5:20So they're basically calling those accidental landlords. They wanted to sell. It couldn't sell. It became a rental unit. So again, that is now growing or rising 2.3%. But where are accidental landlords growing the most? And not growing the most. If you wanted to get that data again, Lance Lambert has a wonderful report. Let's start with the lowest. So I have the top five. If you want to see more, you can go to Lance Lambert's Rezzy Club and get the list. Coming in at 5th place, Buffalo, New York, only 0.8% of rentals were accidental landlords. Tied for 3rd place at 0.7 is New York City and Hartford, Connecticut. In 2nd or I guess 1st place, Tied for 1st place is Boston, Massachusetts, and Providence Road Island. What do I take from this list?

6:21That is the upper north east, all 5 of the markets with the least accidental landlords are in the upper north east. What does that mean? It also means that that probably is the healthiest resale market today. If you look at the data about where homes are still selling fast, where they're selling at or above list, it is all north east. Okay, let's go to the other side. What markets have the highest share of accidental landlords? Again, we'll start in 5th place this time with Portland, Portland, Oregon, 3.7%. San Antonio comes in in 4th place at 3.9%, Austin, Texas at 4.1, Houston, Texas at 4.2, and finally Denver, Colorado, Denver, Colorado coming in at 4.9%, basically 1 in 5 rental homes was listed before it was a rental.

7:24So again, some very interesting data on accidental landlords. Let's congratulate somebody for joining our amazing school community. Nicholas, thank you for joining. Thank you for introducing yourself. Congratulations on your small real estate portfolio. Love to see you in here, interacting. And also just so you know, there are two accountability group calls. One already happened, 6 a.m. on Mondays, the start the week group. You got to like folks who start at 6 a.m. Pacific, much respect. And then we have AI for real estate tonight at 5 o'clock Pacific. So join that and get in the community. I did hear from someone that they didn't see my videos or audio on Apple podcast and Spotify. I would actually check your settings because I would confirm with my team that uploads have continued. There's been no break, no vacations, nothing. My team tells me they're all there. So maybe reload the app or something.

8:28All the data should be there. I don't know if you've looked at this, but I certainly did. Since the Iran war broke out, there is one asset that seems to be performing better than most. And it may not be what you think it is. It may not be, it is certainly not gold. The asset that has performed the best since the Iran war broke out, which I think was two weeks ago, is actually Bitcoin. Bitcoin solidly, I think is up 10%, maybe even 12% this morning from when the war started. Don't know what that means. Don't know if it's, I don't know what it means, but I just thought it was interesting. We've talked a lot of crap about Bitcoin, so let's give them some love. It is performed pretty good compared to other assets. As for the week, we do have some earnings coming out. A couple that I'm tracking for the week on Tuesday, Lululemon. Lululemon is going to be interesting because again, the case-shaped economy is the top into the K is white collar pulling back. I think Lululemon will give us a sign of that.

9:30DocuSign also reports Tuesday. Wednesday, we get Macy's Nike in five below. I'll be interested to see what Nike is doing. Thursday, Alibaba FedEx, Darden restaurants and Accenture. I'm actually going to be interested in both FedEx and Darden restaurants. Again, what is going on in our economy. Logan Monteshammi is talking about, from Housing Wire, is talking about the housing data is still positive week on week. However, as rates stay elevated, he expects that to change quickly. I do want to catch people up. I do have this writing Musogi or Musogi. I am still doing that. I haven't published a lot of things because I'm working on something bigger. I did a lot of kind of blog posts in January and February, but for March, I'm trying to write longer things, which is actually a lot more difficult. I'm still continuing five days a week to write. I just haven't published anything in a while because I'm working on trying to do more than

10:35just blog posts kind of writing. Still tracking that. Thank you for asking. We do have Jerome Powell in the Fed decision this week. It's all about the press conference. It's all about the dot plot. As far as Jerome Powell in front of the microphone, I'm going to be interested in his discussions on stagflation. Again, he famously said nine months ago, I don't see the stag or the flation. Well, Jerome, you can't say that now. So what if anything will he say? And then the dot plot, the dot plot is going to be very important because I think all of these measures are going to change, but by how much? What are they going to say about GDP? Are they going to pull it back? What are they going to say about unemployment? Is it going to rise? What will they say about inflation? Are they afraid? And then finally, rate cuts. And again, on the rate cut front, I want to know if one of the Fed presidents has the balls to say the next move is up, not down.

11:40I don't know. I don't know if anybody's brave enough, but we might get one Fed president that says the next move is up, not down. Morgan Stanley is warning that stocks may struggle through April before rebounding that thanks to Mike Wilson. And then finally, as somebody who just completed their taxes yesterday, the average tax refund is up to a record $3,742. I once again have to write a check. I don't remember the last time I had a refund. It was a long time ago. But yes, I will be writing another check to the government, which means I made money. I was profitable. So to all those haters out there, keep patent, better luck next year, we will see what happens. And then the last thing we did get our first economic data of the week, the Empire State manufacturing. And unfortunately, not a good number, frankly, terrible number. It was actually negative, which means contracting.

12:42It was negative point two. It was expected to be up 3.9. And then last was seven, seven point one. So again, quite the change from a month ago. So folks, that is the daily financial news. Make sure you join school. We're almost 650 people go in the same direction. Lots of you need friends that are doing this wealth building journey. I'm giving you the platform. I'm giving you the community. Get in there, introduce yourself, 10, 11 accountability groups, thousands of dollars in education, forums to ask questions. There is no better place. Plus, you can get the livestream of our Vegas event with folks like the uneducated economist, pace Morby, the three amigos, and so much more. Get in there. Watch the replay. And yep, have some fun. And don't forget to give steadily a shot. They saved Olivia and I 20 grand last year, a little bit over 20 grand, which we are thankful for. Have fun. Take care. Peace.