Peter Schiff: Home Prices to Drop, Commercial Real Estate Defaults, Economic Storm 2020Apr 20, 2020
Peter Schiff predicts that
priceswill crash. What a prediction. We're going to talk about one of his most recent podcasts here. What he talked about about housing
prices. JP Morgan withdraws
homeequity loans. We see that the tightening of the loans is more and more. extreme and that could put more downward pressure on home prices, we're going to talk about that, we're also going to talk about the
estatebubble, it's likely to burst as well and that's more risk for banks as well let's get started now that we've been talking a lot about the housing market lately with everything that's been going on with the lockdown the lockdown financial crisis how some people call it but as we talked about earlier home prices were way inflated this crisis this lockdown crisis is just a pin bursting the bubble as we talked about this a few days ago and we've been talking about this you know a lot more recently as this has been going on but we haven't seen too many known emails.
Economists do predict a lot of bloodshed in the housing market, but now we have Peter Schiff out there and we're going to go ahead and listen to a recent podcast excerpt from him. financial crisis it wasn't because property prices went down it was because property prices went down it meant loans secured by
estatewere not being paid and to the extent that banks had to foreclose on the collateral it wasn't there to do the banks are doing the same thing now, the banks are even more exposed today than in 2008, this is an even bigger crisis now than in 2008 because we have a lot more debt, we have a lot more borrowers that are in trouble and on top of all that on top of all the borrowers that are in problems due to these closings, homeowners are going to have the same problems because real estate prices are about to collapse.
More Interesting Facts About,
peter schiff home prices to drop commercial real estate defaults economic storm 2020...
I'll get to that a bit later. On the podcast, because in the meantime, existing home prices are going to crash, and again, I went over this on my last podcast, lenders are really tightening lending standards, making it much harder for homeowners or buyers potentials to qualify for a mortgage and now require large down payments 20% who knows maybe some of them will start walking 25 or 30% we'll see but 20% is a big hurdle if you're buying a home in an expensive market how many People have a 20% down payment in California so here you go now a couple of key phrases from your little rant there and it's about an hour long podcast.
I'll link to it if you'd like to see the full podcast. I'm sure most of you referred to Peter's work that you're familiar with at some point over the years, but he used a couple of key phrases, your house prices are going to crash, that's a pretty bold statement. Now, I think house prices will go down. I don't think they'll collapse, not exactly, I think he tends to use words that grab people's attention, but it depends on your definition, I mean, I think it's going to be a pretty big decline, but not so much of a collapse that could happen. over the course of a few months, which some people might call a crash because they know house prices and sales move slower than of course buying and selling houses on the stock market sometimes it takes several months with all that's involved but you can see his point and it sounds a lot like what we've been talking about here if they tighten up lending that's going to be a big driver of weakening home prices in the real estate market could get very ugly and we're going to talk about
commercialreal estate here in a bit too but just to review what we've been talking about here as the housing market we know that JPMorgan has now really tightened their tip heh 700 loan credit down 20% we've talked about that in a couple of videos but now home equity lines of credit are going away as well It's going to be harder to get and that's going to be a real pain point for many homeowners.
Let's talk about that recent article here. JPMorgan Chase takes advantage of it to accept HELOC applications as home equity lines of credit due to uncertainty in the markets and this is against it. something else that will likely put downward pressure on home prices when sellers lose their lifeline and for many people these home equity lines of credit were a lifeline when times got tough and when they wanted to make improvements in their house or when they just fell behind like a lot of people are doing now home equity was a big thing they liked to retire and go to as a bailout method if you take that away that really starts to rack up more and more homeowners in dire financial position and we have to see if this extends to multi-homeowners such as investors, corporations and institutions but we know that when the bank tightens lending because this market is way above level It was obvious that it could easily cause a price
Now anything could happen. I am not making a prediction here about the virus situation. There could be a medicine coming out. There could be a treatment or time could make this fade away. Anything could happen, but there is a very strong possibility of a major housing market correction that we have all been watching and waiting for a long time, but this is something that again could propel you much faster and much stronger than most. . people had anticipated let's talk about commercial real estate Bloomberg article right here The fight for commercial rent turns ugly with the wave of default coming so many banks are also hooked on commercial real estate and this is also in a highly leveraged sector of the US economy like commercial real estate almost everything is in a bubble but commercial real estate is another great area to watch in some areas up to 80% of commercial property tenants did not pay the rent in April, then this goes back to the owners of these and again a lot of these owners went out and got commercial loans for these buildings for these office buildings for these for these strip malls and again another over-leveraged part of the economy that's also in risk, especially with the large number of retailers not paying rent and I'll just read an excerpt from here so far this month some mall owners got as little as fifteen percent of what they were owed based on an estimate now in some cases the owners have been working with their tenants the owners have been promoting the rent deferral saying that tenants can reduce payments now as long as they pay the balance at some point but again as we talked deferrals are not long-term solution because when the deferral is done when it ends you have to come back and pay that amount you didn't pay, so it's not free rent by any means, so it's not a get out of jail car. d for a lot of these companies so we're going to see how this plays out but so far it seems very risky for the banks and the owners now anything could happen again the banks could be bailed out ad infinitum and it wouldn't . be surprised but the fact that the banks are pulling out leads us to believe that the banks are not so sure that the bailouts are going to be there relentlessly and let's read another section here of this Bloomberg article many owners are rushing to get there to agreements. with lenders to avoid their own
defaultsso now not only do we have homeowners calling and begging the banks to help them and forgive them, we now have commercial property owners also trying to call their banks and get some kind of of leniency at the same time as negotiating with your tenants about leniency as well so pretty much everything is up in the air right now and again this is very risky and we will have to watch it for you we will go ahead and wr ap this but first Before we leave, I just wanted to let you know that I updated our seeds page with seeds that are now in stock because a lot of these seed sellers on Amazon were selling out and CBS reported here that the seed companies can't keep up. as more Americans are turning to growing their own food this is another area to look at because not only do you have the lockdowns and layoffs that are affecting people's income with unlocking everyone, more people are turning to gardening and that in itself causes increased demand. for seeds but we also have the supply chain and food shortages and the panic buying that people are doing in a lot of these grocery stores causing food shortages as well another reason to get seeds so check out the link below if you are interested in my desktop. off the channel if you go to the link below and go and buy something so it would be awesome if you could help this channel and also help you get some seeds you don't want t seeds to sell and then all of a sudden see more food shortages if this virus continues several months into the future even into the next year imagine what could happen to the food supply and even the seeds at this point it will be all for this update please give us a thumbs up if you like what we talked about if you got anything from this video please subscribe and come back for more information to help us also another great thing just leave a comment below lots of great comments ultimately we will make a video here at least once a week we're going to start releasing videos of just your comments and me trying to answer maybe some of the questions or just going through and highlighting some of the comments that I think are ge nials but y'all are great thank you so much for being here hope you're doing well and staying afloat in this crazy America time in world history as we see the economy begin to transform and the economy may don't bounce back when this lockdown is over because there's a lot of damage being done and a lot of people aren't going to spend like they used to even after the lockdowns are over so there's something to think about.
I will watch it for you. Thank you all very much for being here. Goodbye for now. your
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