YesTalk-209 - The Future, Real Estate, Stocks, Gold & Silver - Your Questions Answered

Welcome to Kevin Ward's Yes Talk for Realtors. This is Kevin Ward. I rarely do this, but today I'm going to do a video where I'm specifically going to answer a lot of the questions comments I've gotten on some of my previous recent videos, especially a video that we just did last week called Housing the housing Market forecast 2020, the factors and Does It Matter. I've had a lot of comments on that, but a lot of comments on some previous videos that I'm just going to kind of address a few of those and answer some of the great questions that you guys have been giving. So if this video is helpful for you and you'd like to get feedback directly from me and answer your questions, post questions that you have about real estate, about the markets, about the economy down in the comments below so that I can help make decisions about what future content I'm going to be creating. And if you're liking these videos, make sure that you give them a thumbs up. And also subscribe, subscribe to the channel. I'm calling this video something about real estate, Skatox, Gold, silver and all that kind of stuff because I'm getting questions about this. So here's just as an example, actually this was a comment Ronald, in a previous video. It's wise to start considering buying precious metals, hedge against inevitable inflation. And I've had a couple other subscribers also ask, well, why are you not talking about gold? Why are you not talking about silver? Why are you not talking about precious metals? And the reason primarily is because I train real estate agents and my specialty is residential real estate. And so first I stay in my lane. So that's the first thing. Now I am going to answer the question because this question has come up over and over, people talking about, well, if I'm not investing in real estate, if right now is not a good time to buy real estate, what should I be buying? Should I be investing in the stock market? Should I be investing in gold and silver? What should I be investing in? And so if you've been watching in the stock market, if you've been watching gold and silver, gold prices are nearing record highs. They've been bumping up at nineteen hundred dollars an ounce for the last few days. Silver is been on a tear and is expected to go up a whole lot more. The gold silver ratio, there's a whole lot of things going on that are making gold and silver look like a good place to put money. If you're looking for a hedge against inflation, if you are looking for A safe haven in the event of the US dollar collapse. Now these are complex conversations, deep dive conversations. Yes. I study this stuff because it matters to me and because of what my wife and I where we're putting our money and the things we're investing in. Because right now real estate is extremely expensive and it's been, we've been in a bubble. And so right now just buying real estate, investing in real estate to buy and hold, you're going to be paying a prem for most real estate. And so that's not where we've been looking at putting money. And so we. I've been studying the markets, I've been studying stock market, I studied precious metals and all of that. I believe that it is a that gold and silver is a good place to put your money. Right now silver is by far the better buy than gold just because of the historical gold silver ratio. Silver is probably way undervalued compared to gold. So why have I not mentioned it? Because it's not my lane and I'm totally cool with, with having the conversation about it. But I'm not going to become your advisor on all things gold and silver. I will tell you that. Who I follow, I follow Mike Maloney who wrote the book with Robert Kiyosaki or he is Robert Kiyosaki's gold precious metals mentor, Robert Michael Maloney. He wrote the book Something the Investor's Guide to Investing in Gold and silver back in 2006 or seven. And he actually called the economic collapse the global financial crisis. He actually called it before it happened. Another guy that I follow is Peter Schiff and I follow Peter Schiff because he called the economic collapse as well in a 2006 speech to the Mortgage Bankers Association. And he nailed and said this is exactly what's going to happen. He is very sharp. Now I'll tell you, both of them, they own gold and silver companies and so they have an agenda but they both have a very strong track record if you want to understand more about precious metals. All right, from Zamara, if I'm saying your name right. So who are they going to sell houses to if people are not having a job? So I was talking about that with the economy direction it's going and home prices that when inventory floods on the market. And you can watch the previous video on the housing market forecast 2020, I'll put the link down in the description below so you can find out the context of this. But basically if people are, if you. We had a lot of people that a lot of houses going to be coming on the market. Who are they going to sell these houses to if people are not having a job, if the unemployment is bad? Now just first to kind of set context for this, it is now middle of July or the third week of July as I'm recording this. And they just reported last Week's numbers, another 1.4 million unemployment filings, which means since March have been over 52 million Americans that have filed for unemployment. We're talking unbelievable numbers that you're talking. If unemployment was tracked today the way that it was tracked in the 1930s, we are right now in the highest, have the highest unemployment in the history of America. Now the reason our unemployment numbers appear to be a lot lower today than they were back in the Great Depression is because the government tracks unemployment statistics differently today than they did back in the 1930s. All right, so with that being said, there is massive unemployment going right now. The economy is in a tailspin. There's the stock market still going up, but it's disconnected. It's totally disconnected from the real economy. You have the real economy and then you have the financial markets. And they are not connected, they are not the same. So that just being a context. So people ask me about what I think about investing in the stock market. I tend to subscribe to what Robert Kiyosaki said and trains in his teaching on investing. He said it's not a question of is the stock market a good place to invest. The question is, are you a knowledgeable, are you a good investor? Stock market investor. Do you know what you're doing? Same with precious metals, gold, silver, any commodity, any asset class, Real estate, same way. Is real estate a good investment? Well, it is if you know what you're doing. Okay, if you are a knowledgeable investor, it is. If you're not, you can lose your shirt. Alright, so the question here is who are they going to sell houses to if their people don't have a job? Well, they're not going to sell it to people don't have a job. But there's always going to be people that have a job. And so for every piece of real estate, there is always going to be a buyer. Now the challenge is when there are fewer buyers and more sellers, what happens? Well, what happens is the fewer buyers, they have more houses to choose from. House prices are going to come down. So who's going to buy them? People that are looking to buy a house today, how much are they going to pay for it? Is the is a function of supply and demand. And when There is a much greater supply and a lot lower demand prices are going to come down to because that's who the buyers are going to pick, the houses that have the best house for the money. Sy asks Kevin if mass inflation happens in the near future. Now, I'm not really talking about inflation, not at least in detail, but if mass inflation happens in the near future, and to be honest, it's probably not going to happen in the near future, it may happen in the distant future, but in the near future, meaning in the next six months to 12 months, we're probably not going to see massive inflation Once we get 12 months out next year, 2021, anything could, anything goes, especially after the election. What if, if mass inflation happens in the near future, would the real estate go up with inflation even if there are fewer buyers? So would the right thing be to hold on, hold on, mortgage in long term with inflation? Okay, so the question is if there is massive inflation, I'm going to presume from that they mean hyperinf inflation. Hyperinflation means the dollar becomes worth a whole lot less and therefore it takes more dollars to buy the same thing. Well, massive inflation, we'll call it hyperinflation, where inflation goes up in double digits every year and can be going up, literally can be going up double digits every month. If you get into hyperinflation with the Feds printing an unlimited supply of money, every dollar that's already in existence becomes worth less because there's nothing backing it up. So the question is if inflation shoots through the roof or house price shoot up. And so if Today it takes $5 to buy a loaf of bread or whatever it is, okay, $5 to buy a loaf of bread. And if two years from now it costs $50 to buy a loaf of bread because of Matt, because of inflation, that means it's costing 10 times as much to buy a loaf of bread, our house is going to be 10 times expensive. And the answer is probably not. There is a thing going on right now, and I think they call it stagflation or in deflation, where you literally have inflation and deflation happening at the same time. And it depends on what it is. So consumer products can be like, you've noticed grocery prices going up, there's inflation, but housing prices are not. There's deflation in a lot of things because there's less people have money to buy a lot of things, so people are spending less money. So there is deflation in some areas and inflation in other areas. So that is going to happen. What's going to happen with real estate? I would not count on real estate appreciating dramatically to keep up with inflation. If the dollar starts losing its value now, it's possible, but if that happens, we have a much bigger problem of what hyperinflation does to the economy and what actually ends up happening to the dollar itself. And that's one of those scenarios where all of a sudden gold and silver become the right place to have your money, not in real estate. But that again is there's a whole lot of factors and a whole lot of uncertainties that go into play to make that happen. As long as the US Dollar is still the reserve currency of the world, the global reserve currency, that US Dollar is fairly strong and fairly stable. If it ever, you know, if China and they ever create a separate reserve currency that people start trade, other countries start trading on, then all bets are off. Kevin, please tell us what you think. What do you think about rental property are going to do? Are rental properties going to be forced to lower their rents due to unemployment and competition between rental property owners? I love your videos. I'm already a subscriber. Please advise. Okay, so are rental properties, if you own cash flow real estate, rental properties, are they, are rents going to go up? Are they going to go down? Well, this gets into another thing that it depends on the area. So we talk about the real estate market. There's really not nowadays A1 real estate market across, even across the United States, there are pockets of real estate. In fact, I had one comment on one of my videos recently that said the one thing you're not talking about is you're not talking about the power of location. Remember location, location, location. They kind of chastised me for not bringing that up. Location. And it's a great point because location is really, really a critical factor here. And especially when you see things that are happening like they talk about in the big cities, like in New York and Manhattan, where people are fleeing the cities and heading out to the suburbs with that kind of stuff happening, then you're seeing massive vacancies. You're going to literally start seeing price drops in certain areas while prices are going up in other. So you have people leaving big cities and going to suburbs or going to smaller cities or leaving one state and going to another state. We've been seeing that now for the last several years where people are a lot of people moving out of places like California, where I live, they're leaving California and go like to Texas where I'm from. There's A ton of that happening. So that those kind of forces mean that what's happening in one market may not be the same as what's happening in another market. So where you have rents right now, the rents are going to be dropping dramatically, it looks like in New York City. But there's going to be other places where demand for rents are going to go up. So the short answer is it depends. I know that's not what you want to hear, but it depends. There are some areas where rents are going to go up and demand is going to go up and there are other areas where rent is going to come down because demand is going to drop. So you have to study and pay attention to your market or find a great real estate agent or broker that is savvy of what is actually happening in the residential real estate market, if that's what you're looking at. Now in same thing is true in commercial real estate is what's going to be happening in commercial real estate? Well, it depends on what type of commercial real estate we're talking about. Retail, big trouble, restaurant, big trouble, hotels, hospitality, travel, all of that. That kind of real estate is in big trouble right now. Now you know what's in a big trouble right now may not be in big trouble in a year or two or three. And sometimes it's going to be worse. Office space. If every. With everybody starting to work, more and more companies letting their people work, virtual companies are going to be downsizing their amount of office space. And over the last 10 years there have been massive amounts of commercial real estate being built and developed and high rise and office buildings and all this kind of stuff. There's going to be a lot, a lot, a lot of vacant commercial real estate. So that is going to drive prices down both in terms of rents and in terms of property values. And with all of that, there's going to be a lot of opportunity, but not yet because it takes time for real estate prices to adjust with what are what the changes that are happening in the economy. Okay, so Tony says, what do you think is going to happen with interest rates? Well, interest rates are going to stay low. They're, they're, period, end of story. For the foreseeable future. Interest rates are going to stay low. With the Fed's printing the kind of money they're printing and the national debt doing what it's doing there, there is no options. They cannot raise interest rates. Interest rates are going to stay low for the foreseeable future from illegal immigration, something or other. I'm curious the media keeps talking about housing going up because of money printing. I do realize that jobs are the issue. My view is that the economy is in terrible trouble because you can't pay for a mortgage if you don't have a job. Can you shed some light on this to straighten out my thoughts? Well, I pretty much have already addressed this. Housing prices are really not going up because of money printing. They're going up. If they've been like in some areas, they've still been going up. Here in the 2020, even during the pandemic, they've continued to go up because of low interest rates and pent up demand. Not so much because of the feds printing money. Now the president's printing money has kept the stock market going up, but not so much housing prices going up. And then next question from Desiree. What about land or lots? What about buying vacant land, wanting to build a home? We're in Austin, Texas, ready to buy and now same principles apply to this as well. Well, if you're buying a land or lot, it depends on why you're buying it. So if you're buying it as an investment, the biggest problem with buying vacant land is you don't make any money on it. So there's no cash flow. So you're buying something speculating that is going to someday appreciate. However, if you're buying it to develop it, then it's a different conversation. Now here they're talking about buying it to build a home on. Well that's fine. If you want to buy a piece of land, get a good deal on it. Right now, again, real estate is expensive right now it has gone up, up, up, up, up, up. For the last 10 years, almost universally across the United States and in most places around, it has continued to go up and it is still high. So if the economy tanks and continues to tank as it is, and whenever the moratorium on foreclosures is lifted, whenever forbearance starts running out, when this unemployment start, people finally all this hits. The housing market is going to be flooded with inventory. There's going to be houses coming on the market, there's going to be fewer buyers and home prices are going to start going down. And with that, all real estate prices will eventually come down. The question is how long you want to wait. What kind of position are you in to buy right now? If you can get a good deal on a lot, you want to build on your own, subcontract or whatever? Right now there's probably going to be a lot less building going on so you're going to be able to find the substance, subcontractors, your vendors and all that, your services. You're going to be able to hire them a lot cheaper than you could have a year ago, okay? Because they don't have work. So just having it built, if you're hiring it out and you're contracting yourself or whatever, then if you can find the deal and you know what you want, you got the money and you got the financial stability to do it, and you know that's what you want to do, then you know it's a personal decision. Is it a good real estate investment or a good use of your money? Probably not. But most people do not buy and sell their home as a investment. They buy it because they want a place to live. This is just a reality. People buy a house because they want a place to live and they buy for what they want and they buy what they can afford because they enjoy living there. So you got people that are going, like, I want to buy right now. Interest rates are low. Is it wrong for me to buy right now? Well, not if you have the money and not if you have a good job and stable income and you've got the financial depth to weather the storm, however bad it goes. And you can get a good deal on a house and with the interest rates low, you can buy a house. And if you're happy and you can make it, as long as you can make your monthly payments and you're happy, go, go for it. If you're asking, is it a good financial investment to buy now or should I wait and get a better deal a year from now or two years from now? If you're looking for the best deal, I would wait. But that means until then you're going to live somewhere, so you're going to rent, whatever. Again, those are personal decisions. But most people do not buy and sell their own personal residence as an investment. They buy it for lifestyle, they buy it for how they want to live because that's where you sleep, it's where you eat, it's where you relax. It's your castle, it's your home, it's where you have security. So those are a lot of factors that go into that. So that is all the questions I'm going to answer today. But I really appreciate the engagement that you guys have had with me on a lot of my videos asking questions and posting those. Sometimes I'll do individual videos on real estate related questions for real estate agents that I'll do one video per question. But in this case, we got a lot of questions about the market and all of that because of what's happening. So I just wanted to shoot this video. I hope it's been helpful for you. If it has, give it a thumbs up. Let me know what your thoughts are, what I've missed, what you want to hear more about, and thank you for watching. I'll see you on the next video. Hey there, it's Kevin.

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