Housing Prices Are Going Negative (But No One Is Saying It)

The power is shifting away from sellers and quickly moving to buyers and we're already starting to see nationally housing prices are about to go negative. This could really impact your house if you're looking to sell, if you're looking to buy, you really need to be thinking am I going to be holding on to this house for the next 10, 20, 30 years and figuring out the cost associated with that versus buying versus renting. Let's dig into this video about information you need to know to be able to understand what's going on. So, the first thing that you'll want to see here is this is Freddie Mac's USA Home House Price Index year-over-year.

As you can see, we had this massive run-up period from '20 to '21 and then we decelerated very quickly as the Fed started to raise interest rates. We saw a little pop after that with rates coming back down and now we're starting to see prices go lower. This is because we're seeing inventory continue to stack, the affordability crisis is pushing buyers off to the sidelines. But, let's dig into where folks are in terms of their forecast for 2026.

National home prices are indeed about to go negative when you look at it in real terms relative to inflation. And inflation is higher than every single forecast out there for housing prices. And so, when you're talking about real terms, you're saying, "Hey, compared to inflation, will home prices be higher or lower?" And the answer for everybody is right now is lower. Zillow just revised down their forecast for 2026 nationally from 2.1% now to .9% and I'm sure after this oil spike and the inflation expectations that are now above 5%, that we could even see these numbers revised even lower.

Redfin revised theirs down to 1%. NAR, the National Association of Realtors, revised their forecast down to 2% and they even said specifically in real terms home prices will decline this year in 2026. And NAR generally has the most optimistic view of the real estate market. Uh so that should be really telling to you.

Realtor.com is at 2.2% and Resi Club is at 1.4% where inflation ends up this year we're not sure, but the numbers that we're seeing right now it could be above 5% and that's a huge problem. That means if you buy a house in real terms, let's say prices are at rise 2% this year in real estate then your real terms basically 3% loss and that's a huge deal and that shifts the entire housing narrative and shifts the narrative for investors who are generally in areas like Florida up to 30% of home purchases. Now across the board the nation's largest metro areas are having a weaker year-over-year home price shift this spring than a year ago. So look at this Austin obviously has one of the worst shifts.

You can see it shifts from this kind of gray area over here on the right to where it is today. They're all down shifting compared what they are a year ago. You can see in Jacksonville we are negative 1.5 and now we're at 2.0. Austin by far is the worst.

Last year is negative 3.8% price shift to now a 5.9% price shift. And by the way, this is the average. There's definitely neighborhoods and areas that are way more impacted. In Jacksonville, Florida for example, we have areas that are down 10, 15, 20% already from the peak pricing in 2022.

And so we expect prices to continue to fall. Now prices didn't fall because just demand disappeared. There's tons of demand. Buyers want to buy.

People who are renting right now they want to become home owners and they want to achieve this version of the American dream. But the prices are just crazy and the payments that, you know, are out there for the price that we're at plus the interest rate that we're at right now, which is now just cracked 6.5%. It broke the buyer and these buyers are saying why would I buy when I can rent that same house or a similar house for 500, 800, a thousand dollars less than what the payment would be for buying. So, the truth is you can't just double prices, double interest rates, and then expect the market to just keep going.

And we're seeing this shift across the board, and that's why we're going to be seeing real prices negative this year for real estate. And it's not just home prices, it's rents, too. So, everyone chased the same trade when interest rates were near zero, the zero interest rate policy by the Federal Reserve. People were building multi-family.

They were buying multi-family deals. They flooded the Sunbelt. They bought single-family homes. They bought Airbnbs, and they assumed that the Sunbelt areas would continue to have massive demand from California and New York.

So, the speculation just went crazy over the last few years, and then the supply continued to stack from all this building, and then the demand crumbled. And it's crumbling right now. We're at one of the lowest levels of demand we've ever seen in history, and this is of course breaking the pricing, which pricing generally takes 6 to 8 months for sellers to wake up, "Hey, maybe I need to reduce the price to where things actually are." And people are still this still at this point in time trying to price their home at 2021, 2022 levels, and it's a huge problem, and we are beyond the peak in most markets, especially here in the Sunbelt now. So, it doesn't just stop at rents, right?

When you see these rents drop, you see the investor demand drop. So, we saw demand basically just flatline here in Northeast Florida for the most part. Unless you're getting stuff that's 60, 70 cents on the dollar, the demand is a lot lower. And then obviously as investor demand is driving prices down.

So, as we see rents fall, we're going to see investors start to drop off as well. And this feedback loop and this circular loop is just starting, where you can see the ball start rolling downhill. People start expecting, "Hey, rent prices will be lower next year. Home prices will be lower next year.

I'm going to sit on the sidelines." And that's when the listings just continue to stack every single month. And the problem also is that the next generation of home buyers is already struggling with home payments. So, this is a great chart. It says 49% of Americans are now struggling to afford regular rent or mortgage payments up from 44% of May last year, according to a Redfin survey.

So, basically half of Americans are really struggling, but Gen Z, the younger generation, is being hit the hardest with 67% struggling to afford housing. Since we saw this massive run-up, Gen X is right behind them at 54%, Millennials behind them, and then baby boomers who have the majority of the wealth are only at 36%. The most common sacrifices that these groups are making to afford housing are they are not eating out as much. We're seeing restaurants actually close.

People are cooking at home now. The pricing of the house of eating out is really expensive. They're skipping vacations. They're delaying medical treatments, and of course, there's the statistics out there that they're even delaying starting a family and getting married just because the price of housing is so taking 30 to 40% of their income, and they just can't keep up with it.

So, this is what's happening now, right? So, the inventory is stacking. This chart comes from Reventure. It's the housing market divided new houses versus existing houses.

The month's supply of new homes, like we said, there's massive speculation, tons of construction, has skyrocketed. And the existing home months of supply is slowly trickling up. It's almost doubled and tripled at this point in time from the bottom. And the problem is that this new home supply is what it is even after hundreds of thousands of dollars in incentives of buying down interest rates, upgrades, giving away free golf carts, all of these type of things to try to incentivize these buyers to overpay for this new home supply inventory.

And the existing homes are have this lock-in effect, right? People who already bought from 2020 to 2022, they got the lowest interest rate out there. It's really hard for them to turn around and start selling the real estate and give up that low rate and go find somewhere else that makes sense mathematically. So, they're just staying put where they are and this is creating the number of transactions to really slow down.

And that's why we see the US home turnover at the lowest rate in decades. So, just 2.8% of homes changed hands in the first 9 months of 2025. This is the lowest we've seen in 30 years. And the reason is because 70% of these homeowners are locked in with these sub-5% mortgages.

They're not selling and the buyers cannot afford to buy. So, we're seeing just the transactions, the number of transactions fall and we're seeing demand fall even more with what we're seeing with oil and the rate spikes now is pushing even more buyers to the sidelines. And so, existing prices are simply just too high. So, this is comparing the existing home prices to pending sales.

As you can see, once the existing home prices hit a certain point and we saw interest rates move up in 2022, that's when we saw the payments just skyrocket and that just drove pending sales to just grind along the bottom here. And we haven't really seen any recovery. Actually, we're expecting now worse pending home sales because of the rate spike recently. And so, this is some trend that we're keeping a very close eye on because the the inventory will continue to stack and if we start to see job loss on top of this and people get distressed and need to sell their house, we're going to see home prices really go negative more than what they are in real terms.

And this is the greatest chart I think that's out there is the US home value to income ratio is near record highs. You can just see that we're basically at the point where we were in 2006 where things could become completely unsustainable. The home values are just way too high relative to the wages. This is certainly true in Sunbelt areas where the the jobs just are not there to support the price.

I think it's really important to look at this in historical terms. Hey, this was a good time to buy real estate, which is near the median here. This was a good time to buy would be around this ratio of 3x. And that would last time that was was around 2012-2013.

And then obviously, you kind of just get run away with the with the massive amount of um investor purchases, the zero interest rate policy, even people buying three to five homes because they saw the low interest rates and they think that, you know, prices will go higher in the future. But here's what's happening now. Cancellations are skyrocketing. Home purchase cancellations are at a record high of 16.31% above the other peak of 16.3% that we saw in 2020.

Buyers are getting payment shock when they see their mortgage applications go through. So they are applying, they're trying to get these mortgage applications going, but once they see the number, they're just like, why would I buy right now? It really doesn't make any sense. Then we're seeing job loss.

Obviously, you see that with large companies, white-collar jobs. People are getting scared. They say, well, I don't want to buy or buy into a falling knife and things like this. And they're renegotiating their deals and the sellers aren't aren't picking that up.

So this is something that I think will again, even though we see pendings at a low number, we're seeing those pendings that are pending now canceling, so it's even lower demand, and the inventory will continue to stack. The other phenomenon that we're watching very closely is this concept of rage quitting, which is when the seller doesn't get the price that they want, they rip their house off of the market, tell their agent they don't know what they're doing, and instead of reducing the price, they get frustrated and just pull their property off the market and then hope for a better price down the line. The reality is that the demographics don't show, there's very few indicators, and we were looking at interest rates coming down, mortgage interest rates coming down as a positive for this year, and then couple weeks ago, unfortunately, that was like the one positive thing that I've been watching, and it just got blown to bits and now we're actually seeing the opposite effect. So, this is a case where buyer demand is continuing to dwindle and sellers are getting frustrated.

They have the lock-in effect. Hey, I don't actually need to sell it. I can't sell it. And they just stay in the house and that that distress or desire to move just continues to just minimize the number of transactions that go through.

And the less transactions that go through is the number one big red flag. That's how these type of downturns begin is transactions stall out as inventory stacks up. So, here here's what we're experiencing in Jacksonville. Obviously, you can see the first housing bubble we had.

We had this massive run-up and then we went boom, right all the way back down to 2000. We lost this entire area of decade of basically growth within a couple of years after. So, it took us 5 years to get that growth, 5 years to lose it all. Then we had this massive run-up for 14, 15 years.

And this is Jacksonville, Florida. And we're we're now down 7% from the peak. We're down 3.6% from year-over-year. And then since 2000, prices have gone up 204%.

Well, wages haven't gone up that much, right? So, that is the big disconnect. So, over time, there's going to have to be a decline in housing prices. I I absolutely could see us going back to 2019 levels for housing prices, which would be a massive decline from where we are right now.

Now, this isn't a crash. It's not exactly like it was in 2008 in terms of people just blindly speculating, but there is still a lot of spec ulation. There is a lot of distress. And I don't think this is going to happen as fast as people think.

I think it's going to be a long-term drawdown for housing as reality resets. Now, we're already starting to see the distress show up across the board. This is distress for people who are Google searching, I need a help with a mortgage. It's the highest level that's ever been recorded, even higher than 2008.

And frankly, people do not Google that unless they're in some sort of financial distress. So, this is something that will show up. There's already issues with services and collecting payments behind the scenes, but it takes time for this data to play out. And obviously, real estate data is 3 to 6 months behind.

And usually, the mainstream media is a year behind. So, please pay attention to this channel. I'd love to hear what you're seeing on the ground. Drop below if you're following.

And of course, if you need help with your mortgage and you're in Florida and you're looking at a short sale, reach out to me. I have contacts in Florida who can absolutely help you. If you need help with a top real estate agent across the country, reach out to me. I can help filter down and get to a top agent who actually knows what they're doing.

80% of agents are horrible. They're not worth the money you pay them. If you want to work with an agent, I can definitely help you filter and find the best one. So, reach out.

My contact information is below in the description. So, here's what's happening in Florida. In Jacksonville, Florida, this is where I'm at. This chart is crazy.

Look at all these green dots. Each one of those represents an active listing. 30.5% of residential homes in Jacksonville, Florida got a price cut. Not last month, not last year, last week.

In 1 week, 30.5% of residential homes got a price cut. So, people are slashing to get out of their property right now. We had 20 26 29 properties do a price cut out of 8,614 active listings. It used to be 12,000 active listings, but we had that rage quitting phenomenon.

We had 20 to 30% of active listings actually ripped their property off the market over the holidays, December 31st. And a lot of those have still not come on back onto the market. They're waiting for the market to show some signs of life for them to to list their house. This is what we call pent-up supply.

So, we have the rage quitting causing pent-up supply. So, we have now have pent-up supply and pent-up demand. And it's just a matter of time. And the demand is there, but it's an affordability crisis.

So, they're sidelined. So, it's a matter of the sellers getting realistic on the price and bringing it down as as the competition continues to grow. So, I think this is a great thing that's needed for the market to stabilize. Unfortunately, the administration is trying to say, "Hey, I'm going to do anything possible to keep prices higher, higher, higher." and manipulate the market further than it's already been manipulated.

Housing is one of the most manipulated markets ever in history with with interest rates. And there's studies out there that show that up to 80% of home price appreciation over the last 40 years is due to falling mortgage interest rates. It's not due to fundamentals. It's due to the rates making it more affordable for people to buy.

And obviously, rates have hit an inflection point and they're moving back up. I think this could be true, especially if we see some sort of credit crisis. So, things things are getting worse and it it is getting worse. This is the US Treasury.

It actually ended up at the end of last week at three at 4.38. So, it even went up higher. This why we saw rates above 6.5%. So, they're going the wrong way.

So, they dropped right below 6% and then boom, they pivoted back up. This is the 10-year Treasury rate. The reason why we quote the 10-year Treasury rate is because the average duration of somebody who stays in a house is generally 8 to 12 years. And that's why we watch the 10-year Treasury and see how that influences the mortgage rates.

They tend to run together because that's the duration of the loan. So, this is a major issue for housing this year. If this lasts another three to four weeks, I think we're going to have a extremely weak busy season, even weaker than what we're seeing now. And right now locally, we're seeing pending sales 31.3% less than last year already.

And so, this is a huge red flag if if this is played on top of it. Now, I'm going to explain to you I'm on X. So, you can follow me there. I have some posts that I put out there and I want to explain some of them cuz people have a ton of questions about some of the stuff that I'm posting.

Right now, one of the things we're seeing locally I'd love to see if you're seeing this in your market, too. So, comment below. Small businesses are feeling it. So, a local Orange Theory is is shutting down.

I asked them why. They said people are moving out of the area. They're having financial stress, membership cancellations. They said this didn't happen every year.

The locations across the country are all seeing declining memberships, and I feel like this is a signal. People are starting to get rid of the discretionary thing. Also, you know, it's a very tough industry. There's lots of gyms around, but what I found out was that Orange Theory was acquired by private equity, and now they're rolling them up.

So, they're taking out these distressed gyms, rolling them up, consolidating, and trying to find a path to profitability cuz the the issue is they rent really premium spots, and it's expensive to run one of these local gyms, and you have to have multiple staff at them. And this is a problem. I mean, if they're shutting down, obviously, they're firing all of those employees, but small businesses are shutting down even if they're franchises. Here's another one that came out.

A friend just closed their karate studio. This is true. Business was fine, but the rent wasn't. This was the issue.

The landlord's loan reset. They had to refinance at a higher rate. The rent doubled, and the tenant had to leave because they couldn't they could not afford the rent. And this is how rate hikes rate mortgage higher mortgage rates run through the system because those people who own these strip malls, they have to if they refinance at a higher rate, they have to pass on this expense to their tenants in order to make up for the for for what they have to pay on the loan.

So, we haven't seen the full impact of this yet. A lot of banks out there a lot of these loans are extend and pretend, but once that higher rate comes in, they have to pass those expenses on, and you can already see a lot of restaurants are already very much struggling, and a lot of these things like Orange Theory are struggling. I can only imagine in 3 to 5 years from now when that extend and pretend kind of stops, I think this will really be day of reckoning for a lot of these small businesses, unfortunately. And I think this is going to happen locally in specific areas that do have that reset and are maybe new strip malls that were that were made and their financing is up and they only got 3 to 5-year financing.

Um obviously a lot of people they like to term out the 30, 40, even some cases 50 years. We've seen that before, too, but it's something that if if they weren't in that case, I think there's going to be a lot of distress and that's going to be a problem down the line and could cause job loss. So, I would love to hear from you. Do you think job loss will crush housing in 2026?

We're already seeing record levels of layoff announcements. I would love to hear from you as well. Are you seeing price cuts in your market? Are you seeing listings stack?

Are you starting to see short sales? Are you starting to see foreclosures? Cuz in Florida, we absolutely are. So, tell me, what are you seeing on the ground in your market?

As always, you can follow me on Substack. I have information there for real estate agents who are looking to grow their business and get to the next level in 10X because this is just data and I know there's a lot of real estate agents who watch this. Please stop watching my YouTube videos. This is not for you.

You need to get out there and start working. This is not something where This is a distraction for you. So, I appreciate you all watching and supporting the channel, asking tons of questions, but the reality is you don't need more information. You know exactly what you need to do to succeed.

I've created a mastermind group, Think Big Question Everything, for agents who want to 10X their business in any fast-changing market and get around other top players and hear what they're doing to succeed and have the biggest year yet because we have tons of agents who are having their biggest year yet. So, uh if you want to connect on that, reach out to me. I'm happy to. If you're looking for a top buyer or seller, do so as well.

I will be traveling this week, uh but on Friday I've committed to do my live session for open Q&A on Friday at noon. So, I will put that out later this week and I look forward to seeing you there. As always, stay connected and I look forward to talking to you soon. Thanks so much.