The Real Estate Market Is Collapsing - Don't Get Caught Off Guard

Michael Zuber (0:02)

Well, it's happening just as expected. I warned you about this a couple of months ago. The last half of 2026 are going to be a disaster for the housing market. We are seeing numbers that we frankly have never seen before, starting with pending home sales just out this morning. Pending home sales across the country were down 7.3%.

Month on month, not year on year, month on month. And they were down 11.3% year on year. They were down across the country with the West and the South taking the greatest impact. The South, traditionally speaking, is the most active. And of course, the West is the most expensive. But all four major regions of the United States are sucking wind. And again, remember, pending home sales down 7.3% month on month or 11.3% year on year. Never forget that just yesterday, we learned that 14.5, call it one out of seven, pending transactions were canceled.

So again, these pending sales, we are going to lose in eighth, maybe a little bit more before those go to closing. Again, if you've been in my community for the last couple of months, you know that this was coming. We told you the second half of the year was going to suck. We told you if you were a flipper or wholesaler, get small, buy better, buy deeper. If you are a buy and hold investor, as always, you should be smiling. These horrific numbers are great news if you are a buy and hold investor, because the inventory is going up, and motivation is going to really start to accelerate. On top of that, what else did we get today? We got a lot of housing data. We got something from HousingWire, shout out Logan Montesami, who is always battling the Crash Bros on X. Logan, thank you for doing that. He reports that active listings are up 5.3% year on year. I'm rounding, I'm rounding. He goes out to the hundreds, I'll just go to the tenths. New listings were up 1%.

Pending home sales and his report were down 13, 13.1% and price cuts are actually up to 43% of 2%. So again, the housing wire data, I believe is week on week. So again, even a better cut of what is happening in the market right now. Not to be outdone, I believe we also have Mike Simon. Yes, we do. Mike Simonson, again, a great real estate follow on X. He reports that pending sales are down to down 12% to only 66,000. Active inventory up 5.2% to 1.14, I believe that's single family. And median price, median list price, median list price down 1.2% year on year. Folks, again, this is what a housing depression, housing recession feels like transactions crater, motivation grows, cancellation grows, can't, expireds grow. It is this, this is the six months of pain that I warned you about. I warned you about it two months ago. Hopefully, if you are in the market, you took action, because it ain't getting better for the next couple of months, at least in my opinion. It's gotten so bad, folks, even Peter Schiff. Peter Schiff is commenting about the housing market, Mr. Goldbug himself.

Peter says, Worst housing market in US history. He's not wrong. This is pretty ugly. I don't know if it's the worst ever. 1981 was pretty bad. I was nine, so I don't really remember it. I can't imagine a housing market with 18% interest is a lot of fun. The GFC obviously was horrible. If you were a normal mom and pop seller, if you were dealing with foreclosures, it was pretty good actually. But yes, the worst housing market in US history is, it's not far from the truth. He may have a point.

This might be or may soon be the worst ever, because I don't think October is going to get much better and the numbers will get worse from here. But again, remember, please, if you're in my, if you are like the one or two percent of the folks out there who are buy and hold 30-year fixed rate debt cash flow day one, all I want you to do is smile when you hear these numbers because you're like, yep, it's time to clean up. It's time to write aggressive offers. It's time to follow up. It's time to seek seller seconds. It's time to get creative. It's time to build wealth. Folks, when there is great pain, there are great wealth opportunities. So please get to work.

As you know, I am not particularly excited about the next six to nine months in the economy. One of those things are what is going on with the war. It looks like the Houthis have once again attacked the Saudis airport. They did that just last week, I think killing 12 folks. That's not good. Now they're also attacking oil fields by Aramco. Again, that's not good. And don't look now, oil is at 105 and Brent is at 110 Again, continually going higher. That is, folks, inflation next month, whether you like it or not, is going to have a four handle.