The Bullish Case For The Housing Market | Jason Hartman

**SPEAKER_1** (0:00)
The wild world of college football continues Labor Day Weekend. On Saturday, East Carolina looks to Shock, Alabama, and Baylor and Auburn battle it out in Atlanta in the Aflac kickoff game. Then, Clemson hits the road, looking to spoil Lane Kiffin's Death Valley debut.
Sunday night, it's Louisville versus Ole Miss in Nashville, in the inaugural Liberty Mutual Music City kickoff game. College Football Labor Day Weekend continues Saturday and Sunday on ABC and the ESPNF.

**Jason Hartman** (0:30)
Understand that the real estate game is not all about price. That's only one metric, and that's the one the vast majority of people focus on. It's a multi-dimensional asset class. As an investor, you can earn money a lot of ways.

**Adam Taggart** (0:52)
Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host, Adam Taggart. And today we're going to have a great discussion on all things in real estate with Jason Hartman. If Jason is new to you, he's first off, just has a lot of boots on the ground knowledge.
He's been involved in several thousand real estate transactions and has owned income properties in 11 states and 17 cities. So he's actually been out there in the trenches doing this for many, many years. He's currently the CEO of Empowered Investor and Real Estate Tools. And just rounding out his whole CV here, he's an economist and market forecaster with 22 years of experience. He's hosted a whole number of podcast shows. You're going to find out real quickly. He's an absolute pro at this.
And he is an ultra high net worth thought leader on the intersection of demographics, economists, and sociology. Jason, thank you so much for coming on the channel. I'm so happy to have you here for the first time.

**Jason Hartman** (1:50)
Hey, Adam, it's great to be on with you. I followed your work for a long time. And I don't even know if you remember this, but you were on my show a couple of times many years ago.
One time when you were partners with Chris. Yeah. And Chris has been on several times over the years as well. I discovered his work back in like, I don't know, 2005, I think it was, when I discovered the original Crash Course.

**Adam Taggart** (2:12)
The early Crash Course days.

**Jason Hartman** (2:13)
On DVD, yes.

**Adam Taggart** (2:15)
Yeah.

**Jason Hartman** (2:17)
Wow.

**Adam Taggart** (2:18)
Well, look, thank you so much. It's such an honor to hear. And our paths have crossed as well in the real world. We've had a couple of different conferences. And I think the last time we saw each other, we said, you know, we should make this happen. And then we're making it happen now. So, all right. One thing to note, too, is folks who are long viewers of this channel have seen a lot of the recent interviews I've done with Nick Jurley and Melody Wright, who are, I think, great analysts, and they're also great friends.
But differences of opinion are what make a market, or differences of analysis. And I'm going to suspect that you're going to have a little bit of a different take than them. You probably agree in some areas, maybe disagree in some others. I think it'd be really useful to kind of look at the areas where you disagree with them, and just be able to drill down a little bit more on that, and give the viewers here just an alternative way to look at the housing market.

**Jason Hartman** (3:18)
I think the first thing everybody needs to do is they need to identify when they talk about the market going up, down, sideways, crashing, not crashing. What metric are they referring to? Are they referring to home prices? That is usually the one I think most people are thinking of, are home prices going to go up, down, or sideways? But there's also sales volume, which is a very important number, and sales volume is way down. I like to give the metaphor of a, you know, if everyone wants to just think of maybe they're a sink in their bathroom for a moment, okay? If the faucet of the sink, the water coming out of the faucet represents new inventory or new listings coming on the market, it's at a trickle. I mean, there aren't many new listings coming on. The basin of the sink represents the existing or current inventory, and that's about, you know, maybe it's about 65% full if we called full normal inventory and overflowing the great recession of 2008-2009.
So that's maybe one way to look at it. And then the drain represents buyer demand or what economists might call the absorption rate. How many properties are being absorbed by buyers? So what do we have? We have the basin of the sink about 65% full, inventory is still pretty low, historically speaking, and compared to population and household formation growth. And then we have the faucet at a trickle, although it's turned up a little bit since COVID era for sure, a little more inventory coming on the market. And then we have the drain that's plugged up. The drain is about 35-40% plugged up, meaning buyers are just not buying at these prices because housing affordability is very, very low. It's the lowest it's been in about 40 years.