Real Estate RESET

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In this video, Ken McElroy takes you on a journey through the unfolding real estate reset, drawing parallels to the 2008 crisis. Discover the factors driving the shift from optimism to panic and gain insights into what this means for property values and investments.
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ABOUT KEN:
Ken is the author of the bestselling books The ABC’s of Real Estate Investing, The Advanced Guide to Real Estate Investing, The ABC’s of Property Management, and has an upcoming book: "ABCs of Buying Rental Property: How You Can Achieve Financial Freedom in Five Years." Ken is a Rich Dad Advisor.
Ken offers a wealth of personal experiences, practical advice, success stories, and even some informative setbacks, all presented here to educate and inspire. Whether you’re a new or seasoned investor, the information and resources on this channel will set you on a path where you and your investments can thrive.
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DISCLAIMERS: Any information or advice available on this channel is intended for educational and general guidance only. Ken McElroy and KenMcElroy.com, LLC shall not be liable for any direct, incidental, consequential, indirect, or punitive damages arising out of access to or use of any of the content available on this channel. Consult a financial advisor or other wealth management professional before you make investments of any kind.
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#kenmcelroy #realestate #realestateinvesting #RealEstate #MarketReset #InterestRates #EconomicCrisis #PropertyValues #Investment #FinancialDownturn #CommercialRealEstate #ResidentialRealEstate #MortgageRates #Inflation #LoanCosts #AssetPrices #BuyerSellerDynamics #BankDefaults #PensionFunds #TaxRevenue #CityServices #EconomicImpact #FinancialLiteracy #FDIC #MarketPanic

[@dylanmoris6211]

catastrophe. This CPI report is a colossal failure. To bring the housing market to a halt, the FED will have to pull all the stops. The unfortunate issue is that other markets are being decimated.If you want to stay green, you have to rely on a lot of diversification. Currently up 14% and being careful. Still a better deal than leaving it in a savings or checking account yielding 0-1 percent interest.

[@williamsbrown4026]

People believe their currency has the worth it does because they have no other option. Even in a hyper-inflationary environment, individuals must continue to use their hyper-inflationary currency since they likely have minimal access to other currencies or gold/silver coins.

[@wayneguy6043]

Hurry up with the reset I want to buy a condo for 75% off in Palm Beach Florida ASAP

[@Chimpsnbps]

Thank you Ken for great content as always, love the ripple effect analogy! My key takeaways: 1. The interest rates are unlikely to decrease and are expected to remain stable for some time, potentially until the end of the next year. 2. As interest rates go up, property values tend to decrease due to increased borrowing costs, leading to lower cash flow for borrowers. 3. Commercial real estate, particularly office buildings and malls, are experiencing defaults on loans, similar to 2008. 4. This defaulting on loans is affecting LPs investments, potentially leading to reduced pensions and 401k. 5. Reduced supply in the real estate market due to higher interest rates is causing property tax revenues to decrease in places like San Francisco, Seattle and Portland leading to city budget deficits and potential tax increases. 6. Real estate market is transitioning into the stage of anxiety, denial, and fear, with a potential for panic in the near future. 7. Build cash reserves and wait for opportunities to buy distressed assets in the coming years.

[@brunol.8608]

Excellent summary. Thanks!

[@y.i.3169]

@kenmcelroy if i remember correctly you were talking how people should be buying properties during the low interest rate days and how there was not going to be a crash, but rather "stagflation". Am i missing something or misunderstanding something as now you are talking about a crash? Thank you!

[@rubenpicallo62]

Umm check out the market in south florida still going higher with super low inventory. In 2008 there was alot of inventory.

[@ayrsine]

These videos are so nutritionally dense. Thanks man!

[@GowerCrowd]

The intricate dance between rising interest rates and their procession effects on the real estate market is truly captivating. It's evident that as rates increase, there's a direct impact on consumer spending and asset prices, especially in the realm of real estate. The current scenario reminds me of the delicate balance between supply and demand dynamics. With real estate supply dwindling due to higher interest rates, cities like Seattle, Portland, and San Francisco are witnessing significant drops in property tax revenues. This, in turn, pressures city services and inevitably leads to tax hikes. It's a cyclical pattern, reminiscent of the 'doom loop' phenomenon. As we navigate these turbulent waters, understanding the underlying economic principles and being financially literate becomes paramount. The interplay between interest rates, real estate values, and city revenues offers a comprehensive view of the challenges and opportunities that lie ahead.

[@onedropontv8863]

This guy is the man. So much good stuff. Real legit stuff. No fluff. All you have to do is talk to the nearest 20 people around you to see how they are doing financially. You will be amazed what you will find. Professionals don’t even have the money to buy homes. Wild wild stuff

[@whalerlife53]

It only takes 4% of property sales to affect 60% of the market. Let that sink in. With the minimum amount of inventory, that’s not a big number. 50% plus of the homes in the US are not owner occupied, with the collapse of airBNB if those property owners decide it’s time to leave the party, the party will be over shortly.

[@Coffeendonuts]

65% of all Americans own their primary residence single family home. Where did you get this 50% of all sfr’s are rentals. Sounds sus

[@whalerlife53]

@@Coffeendonuts50% or 65% is splitting hairs in the grand scheme of things. Either number is huge. The investor is for more likely to sell a now profitable property than the owner occupiers.

[@bendaigle8435]

When rates correct, so you see a price change in building material costs like we saw in 2008 or do you think building materials will stay the same or go higher(due to increased inflation) when they lower rates?

[@anniealexander9616]

Great video! ❤ I remember a video ken did a long time ago. He talked about having patience....

[@leec7757]

Powerful message Ken👍🏾👍🏾 Appreciate the knowledge you deliver (and your wife) every episode, Thx!

[@bartonmulder7228]

Lots of cash buyers and low inventory is putting a damper on that theory though

[@owenkwong3358]

Liked 👍 Thanks Totally agree not buying this soft landing

[@elplata7224]

Thanks Kenny!!

[@moneyninja3852]

You said we need to have cash to buy some "once toxic" assets. Is that in commercial, residential, or both? Thanks!!!

[@gothducks]

How do vacant buildings have an impact on dwindling property taxes? Those properties must still pay taxes and unless there is a re-valuation by the county, those taxes are not going down. Vacant hotel rooms however, definitely have an impact on the hotel tax.

[@Rick1234567S]

Rents are astronomical, which means no disposable income. Which means people already have 2 computers why by another one? They have 2 smart phones, an old one and new one, why buy another one when their car just got repossessed? Do the people understand what happens when rent takes all your money? An absolute total implosion of the capitalist system. No purchasing power, then you can't buy, and if you can't buy they can't sell, and if they can't sell they can't make, and if they can't make you can't work. And if you can't work, you can't eat. But long before that happens you eat hamburger and pasta rice and beans and that destroys your supply lines. And then your grocery stores can't stock food you can't afford or will not buy due to price. People seem to just omit the actual fact that high rents destroys everything and the capitalist system protects the lease makers the building owners as part of the 1 percent and only when all the jobs are gone do people just squat in houses but so what there are no jobs by then. Want to know what is going to happen? They will block off the north east of America and protect NY where they control the banks, they control the markets and their supply lines will be unaffected. They will go maybe down to North Carolina and west to who knows where Virginia probably and cops and national guard and military will block off people fleeing to NY. In the rest of the country anarchy.

[@Slide61]

I agree with the commercial prediction as their debt rolls over. No brainer in the age of teleworking and the resulting low occupancy. Translating that to the residential side where many have 3% thirty year mortgages is a stretch.

[@Fasttowpro]

Very well put thank you Ken!

[@malachybryan1328]

If the yield curve needs to un-invert. The short side has to go down or the long end has to go up, then how will the Fed keep interest rates at this level another year 1/2? Maybe I don't understand something. Thanks!

[@kevpit5044]

Thanks Ken. We really appreciate you!

[@eddyloans]

The real estate market is bifurcated and Trifurcated! Bifurcated between commercial and residential. And residential is split between buyers requiring a mortgage and "cash" buyers. I'm a new agent have been at open houses already and been dealing with older clients, looking to downsize. They'll pay cash because their current house has a boatload of equity or is paid off. Mortgage clients, (the under 50 year olds), are really, really hurting now.

[@jimmyfavereau]

Its a big effin club and you aint in it! Any opportunities on the horizon in mowie? I hear that blue roof paint is a great investment?!?

[@marckuhnmak]

Thanks for the insights Ken!

[@Davefitz04]

Values have not decreased? They initially decreased from June 2022 to dec 2022, and have been rebounding since. You’ve been calling for a crash for a long ass time. You can’t say you “called it” when you call it every year. Keep that in mind even if prices actually do come down.

[@rosebleue983]

you're delulu

[@igalexshinre4418]

Hi Ken what got you to sport a Black Rock tshirt for this video?

[@investingthelike111]

buy low sell high, or just go half in if you are waiting for things to go low.

[@FusionHowie]

unlike the last crash, there are now more buyers than there are homes for sale. That’s kept prices strong and is expected to do so even as foreclosures trickle onto the market.

[@FusionHowie]

No theory just facts Billy Bob

[@marihutten]

That adds up demographically too

[@marihutten]

In 2008 the biggest generation (Boomers) were in investment age, not home buying age. The next largest generation are millenials and they're in home buying age now.

[@nellof1244]

Thank you

[@jesusisthetruth2061]

Paula Deen vibes with those glasses 😂. Thanks for the video, love your content.

[@plymouth1670]

Hey Ken, what's up with that BLACK ROCK Polo?

[@eddyloans]

Real estate, stocks the economy, (anything that has energy), has ebbs and flows, peaks and valleys. It's alway searching for balance. Every positive or forward effect will eventually have an opposite and equal reaction. The force going one way will be the same Force going the other way the only difference is how much time it takes. So, the constant stalling of the economic crashs that should have played out: 2000 net bubble, 2008, Now....Will just have bigger opposite reactions at some point. Some of the reactions to bad economy like civil unrest has already been playing out. The question isn't if or will shit hit, it's when. And it may be in forms we won't recognize.

[@DanKohan]

Your advice to save money and wait for better opportunities next year is a good idea. It's a tricky time, but with the right plan, you can do well even when the market changes. Looking forward to hearing more from you!

[@MgtowRubicon]

Raising bond yields ("interest rates") reduces the price of government bonds. Thus, the government, to get its required cash, must issue more bonds to be monetized (at a lower price) by the Fed, thus dramatically increasing government debt. The current government debt of over $33T is unsustainable and will increase exponentially just to issue more bonds to pay the spiraling interest. A default of government debt is coming and there is no way to prevent it.

[@MgtowRubicon]

The central banks and governments are making the same mistakes as during the Great Depression, and they cannot understand why they aren't getting better results. The big difference this time is that the currency is not backed by gold or anything else; Roosevelt temporarily suspended the gold standard to make worse the Great Depression. The central banks are trying to prevent collapse by printing (counterfeiting) fiat currency until the economy collapses. *"You don't fix a solvency problem with liquidity." -- Mark Yusko*

[@ChefDavidSazz]

The government can't keep raising interest rates sir, not attacking just pointing out there was a reason we dialed down on raising rates this year sir, life will become extremely hard and unbearable if rates where to start rising even further,I do agree on saving up to invest later when we have better opportunities.

[@HaeriniMe]

Can anyone say they are happier than some homeless person living in streets or any where ? what is the point of being slave for a house in these days, the more money you need and make more money other people will need and make , not worth the stress. Stay where you are when sun goes down

[@ginacardarella]

Love your explanation

[@LifeWithRilla]

Facts are facts interest rates don’t go up forever. Fed will cut rates by next summer.

[@ronie6773]

@Ken, how about update video

[@soundsnags2001]

Ken got those Mr. Magoo glasses

[@CarlosGranados-w9q]

I'm looking forward to purchasing my first multi-family building.

[@ihabiano]

Nice video, Ken!

[@Nernst96]

High prices for everything have severely affected my plan. I'm concerned if people who went through the 2008 financial crisis had an easier time than I am having now. The stock market is worrying me as my income has decreased, and I fear I won't have enough savings for retirement since I can't contribute as much as before.

[@Cashflowsavage]

Stay heavy cash! The waiting game is the way to play this market. Study the market knowing your market and strike when your deal shows up.

[@twingzable]

Everyone is waiting...

[@lyleburlingame2276]

LOL!!! Good luck converting the drug money to real estate buddy. Hopefully you don’t have to wait another 10 years because then your heavy cash will be worth 50% less

[@lyleburlingame2276]

You don’t wait to buy real estate. You buy real estate and wait

[@trofas9945]

Wow those glasses though!

[@craiggoldstein5699]

Rates are going up, however so are prices of homes. This housing market prices are so unbalanced.

[@NavyMoo5e]

I disagree that the commercial RE is causing this mess. Residential RE is grossly over valued

[@faze_fresh1236]

Great job Ken!

[@OroborusFMA]

So are home prices are going up or going down?

[@bayareacarnatic]

It can either go up or go down. But for both cases common man will miss out since it happens too fast. What ever happens will recover with in 6 months. If you sit there waiting for it to keep going down, it may reverse really fast and before catch up boom it is already too high.

[@rosebleue983]

Down.

[@greg7743]

One difference between California and the other states is Prop 13. As commercial properties are sold at losses, the tax revenue actially often increases because it was previously limited to 2% per year even in many years where property values increased by 10% or more. So at 6:15, the comment on the need for more taxes may not apply in California. This would have been a good video to have delivered in 2020. I feel like a dope for not buying in 2020. That said, I agree with current conclusions. Keep your powder dry.

[@randypaul5427]

Commercial real estate is following the residential conundrum that Britain is facing. The markets are bifurcated.

[@sergiuspaulus3727]

Interesting BlackRock shirt.

[@michaelmedell4399]

I noticed that as well...brings a question to mind.

[@AberrantArt]

I wonder why he's wearing that. 🤔 Or why he would even WANT to wear that.

[@BrandonTalksFitness]

@@AberrantArtit doesn’t say BlackRock.

[@AberrantArt]

@@BrandonTalksFitness it sure does. Go to @7:34 near the end. You can clearly see it.

[@tonypino1504]

What does it say then? I see black rock?

[@MgtowRubicon]

The Fed manipulation of interest rates (i.e., bond yields) doesn't matter. Government deficit spending is the cause of inflation, because the Fed must monetize the government debt. While the government is deficit spending, the inflation rate will continue to increase. "The most important thing to remember is that inflation is not an act of God, that inflation is not a catastrophe of the elements or *a disease that comes like the plague.* Inflation is a policy." -- Ludwig von Mises

[@summertime104]

Can you explain this in context to what happened to Trump Assets and why is he being criminally charged for something the market did to him and his assets? Will the fed come after other real estate investors or is it just Trump?

[@andrewcleverly1322]

Everyone needs more than their salary to be financial stable. The best thing to do with your money is to invest it rightly, because money left for saving always end up used with no returns.

[@tt3kgtvr4]

In summer 2020, you used the same ripple analogy to say the real estate market would crash from COVID. Didn’t age well

[@johnsmith-duncan3638]

The government kicked the can down the road by printing more money than ever before and keeping rates artificially low. The metrics don’t add up. This cannot sustain for much longer.

[@KenMcElroy]

It’s just been delayed with the stimulus $. Stay tuned

[@johnsmith-duncan3638]

@@KenMcElroy Very well said!

[@SmartestDumbGuy]

I'm connected in a bunch of different industries... I could give you 10 reasons why it's been delayed because government kept changing the rules every 3 months to delay it. Ken is right.

[@mbzinfpt]

​@@KenMcElroyexactly. Why does everybody think they are the only smart people. I started in real estate around 2007 when I was just 24. I saw how things changed dramatically and quickly.

[@joycebarnett6035]

True I am your broker that’s hilarious but people think brokers make too much money hahaha

[@grx812]

In 2020 you said it would fall but the opposite happened.

[@yinglong631]

Don’t fight with the fed and if the government keeps bailing out the economy with QE, the reset can be delayed for a long long time. But the downside is inflation. Need to keep investing instead of holding cash.

[@luvworldpeace]

There is no precession lol we've been in a depression for quite a while now. Let's look at some real numbers, wake up people!

[@punkrrrock]

We are at the Anxiety phase

[@peterbedford2610]

Still waiting for the massive foreclosures you predicted

[@jwheatly]

ken lookin like joan rivers

[@JohnWilliams-wz9vk]

Total .US...reset...over next.. 5 years😊

[@stevenjackson7830]

Hey! Where is the girl

[@marlovarona9562]

Stimulus and all the government free money is the one thing slowing down the upcoming crash. Wait till unemployment hits, yumm

[@rickdunn3863]

Democrats have said over & over: "YOU WILL OWN NOTHING & YOU WILL BE HAPPY". You have to give them credit, they are holding their promise.

[@Coffeendonuts]

It was actually Klaus Schwab at the world economic forum in Davos. If you think it’s just democrats selling us up the river Republicans have held more power over the executive, legislative and judicial branches for the last few decades. They are all selling us out

[@soyascencio]

These phases use to work in the past but with the increase of immigrants that will work for almost nothing, everything will change.

[@eradicator187]

The people in those three cities you named are getting exactly what the deserve. Ha ha hope they enjoy every bit of it.

[@jaygold4467]

Blah,blah, b.s.chicken little. Nonsense above. Interest rates are done. Recession next year with interest rates cuts. Not increases.

[@johncarnettie6804]

You didn't see nothing.

[@JaimeIbanez1]

Sign number one, michael burry aka the smart/autistic guy that predicted the 2008 crash (now with even more experience and money than in 2008) put a huuuge bet against the housing market

[@Prophezora]

Stay alive til '25 lol bruh...☠️

[@mikemorgan8646]

Uhhhh...Nobody has been through "Trump/Covid" before. There's nothing about that event in a Harvard textbook Ken.

[@davidsnow791]

Agree with everything said, thank you. One more thing to consider when purchasing an income property, be weary of climate change coming “dead zones” such as low lying coastal Fl. And the Southwest, Arizona, Nevada etc that will become unlivable if the current climate trends continue to get worse.

[@ckniffen7111]

Casual black rock shirt.