The Jobs Report Is a Lie. And It's About to Crash Housing

We've seen a lot of distress in the real estate market over the last year and it's looking to get worse despite reports coming out saying that jobs are getting better. The reality is that it's not true. Let's dig into the data and could the administration be looking to trick us and pull a fast one based on what they're seeing to keep markets propped up and continue their narrative that everything is okay and nothing is changing when we actually can see things are changing very rapidly. So, this came out from the Wall Street Journal.

US adds 130,000 jobs in January, starting the year off on a stronger footing. However, this number from the BLS continues to get revised down so much so that we're having the largest revision since 2009. And our prediction is that the job market will actually be the number one thing that cracks the housing market. Now, a bunch of job losses could drive interest rates lower.

However, at the same time, if you don't have a job, you can't buy a house. And look at these revisions that we've seen come through. This is from the US BLS employees on non-farm payroll. Actual benchmark revision.

These numbers of revisions. Look at this right here. 862,000 is pretty much what we saw in 2009 2010. These re revisions are massive and it changes the whole way that we can view what's going on in the labor market and our prediction of what could come next.

And if you know somebody who's recently lost their job or had to transition jobs or even got a pay cut, comment below. We'd love to hear from you. What market are you in and what kind of jobs are being lost? Because we're tracking this very closely because you have to have a strong employment market if you want to have a strong housing market.

Now employment even according to this report is not strong in the entire economy. Look at this private education and healthcare right? So they're looking for nurses, they're looking for teachers and the healthcare industry is accelerating very rapidly because we have these aging demographics and there's a lot of care that needs to be taken care of for the boomers plus and older people. And then you see the rest of the economy is -414,000 are shedding jobs, right?

People are consolidating positions. AI is having the impact of hey, one person can do the job of five people. I'll cut those people. I'll make this person more efficient using AI, technology, systems, processes, anything other than hiring a person.

We see this even with Amazon coming out saying we're hiring robots instead of warehouse workers. This is real. This is going to happen in the economy and it's going to accelerate moving forward. And again, if you don't have a job, you can't purchase a house.

And it's a real problem that we're seeing across the industry. And the layoff announcements on the other side of this are at the highest level. They're the most to the start of a year since 2009. And again, our prediction is that the job market will be what ultimately cracks the housing market.

And it takes time for this to play through as each area is independently impacted by where the jobs are actually lost. And uh this is just another comment is the US jobs are disappearing at the fastest pace in January since the great recession. So again, we're having conflicting narratives here. I want you to ask yourself, who do you believe?

Are is the job market actually getting a lot better like the administration is saying or is it actually going to be revised down and things are getting worse? Now look at this chart. This is the Jolts hiring rate versus job openings trend. We are starting to see the trend line move down for the number of job openings, which is a big red flag.

So, not only are companies laying off people, but the number of openings of jobs is also going lower. So, it's a double whammy. And this could change uh quickly going into the future depending on what happens in the economy. Now, the next generation on this is really being left behind.

Starting salaries for new grads out of college have been trending down in real terms. This is the average starting salaries in 2022 for graduates who report finding a job the same year of graduation from $70,000 in real terms all the way down to 54 $55,000. I don't know about you, you cannot buy a house coming out of college on that type of income. The average income according to some sources out there that you need to purchase a median price house today is $111,000.

And you need to make that amount double. Even if you have double two graduates together and they get married, they're not able to go buy a house. That's why we're starting to see the age of that firsttime home buyer move up all the way to 41 years old because they need years and years and years to save up for that down payment, pay off their student loans, etc. And they're starting families later, which is the reason why we're starting to see household formation slow as well, which is a huge red flag for the housing market.

Meanwhile, as the employment market is looking kind of rough, the national housing inventory is back to 2019 levels. Look at this chart. US housing market inventory rebounds heading into 2026. You can see it's almost up to what it was in 2019 levels.

And I'm sure that we're going to surpass this in 2026 and uh more inventory will come on the market. Why? Because we're seeing closed sales slow down, number of pending sales slow down, and even though new listings are down a little bit, they're still coming on at a higher rate than what the current properties are selling for. So, they're going to continue to stack every single month as we trend along this year.

And I have a feeling that a lot of those people who took their house off the market the middle of last year, the end of last year, hoping for higher prices this year, they're going to be relisting their house in a month or two, and we're going to see a pop of new inventory hit the market. Now, we had this idea that there's this massive housing shortage and we need all this inventory. We had a shortage of affordable housing, but not a housing shortage altogether. And this data is actually starting to come out now from the banks.

They're starting to admit this. JP Morgan, the US housing market shortage is exaggerated. The size of the shortage in the US have has been overemphasized with the global research putting out a figure around 1.2 2 million homes significantly below other market estimates. So people are digging into the numbers and really saying, do we actually have a shortage here?

I can tell you here in Florida, we do not have a shortage anymore because migration, domestic net migration is down 93%. Immigration is down 70%. And because of that, we had simply a demand shock during 2020 to 2021 where we just basically had 5 years of growth in 2 years and we didn't have the inventory at that level, but then the builders just went crazy and kept building. And now we have an over supply of inventory because that net migration and immigration has come down so much.

And so the narrative is different from market to market. The Northeast is completely different than what we're seeing here in Florida. You also have the steady Eddie markets. You have California.

But the reality is the most of transactions the juggernaut is in the sunb belt. These are where the most transactions happen. This is where the speculations happen. This is where the investors are at.

And we are a major major factor of what's going on. And now we have too much inventory and prices and rents are coming down. This is really great for the next generation to just let the prices come down and give them an opportunity and give them some breathing room uh to be able to to start building their own wealth. Now the the other issue that we're seeing is the consumers maxed out.

So if we have job loss and the consumer is maxed out, it comes up with a double whammy. Delinquencies are on the rise. This is a huge signal to the market that hey the consumers in distress. The percent of balance 90 days plus delinquent by loan type of credit cards is near the great financial crisis levels.

And it looks like this is getting worse every single month. This is something you want to pay attention to. Obviously, if people are not paying their credit cards, they're not paying their car loans, they're not paying their student loans, all of these delinquencies will add up and they're not going to be able to buy a house, right? Because no one's going to give them a loan if their credit's below a certain level, below 580, it's really hard to get a loan.

And this is where we start to see the stress continue to move through. It's not just credit cards. You can see credit cards here. The student loans are skyrocketing, specifically in the 50-year plus category, which is really interesting.

You see the auto loans start to have some real issues and now we're starting to see mortgages move up a little bit as well, especially the vintage year 2022 to 2025. We're already seeing people in distress who have to do short sales if they move, if they got job loss, something like that. And they're immediately underwater because round trip to sell a house, it costs about 10%. And people don't factor that in.

They also don't factor in the holding cost of real estate, the upgrades they need to make, the taxes they need to make, the insurance that they're doing, their grass dying because we had this cold spell that came through, right? People don't factor in all of these little costs into their real estate holdings and it creates this financial drag for them. Now, the first reality is that transactions slow. We're seeing that right now drastically.

After that, the listings stack up and then eventually the sellers capitulate on their price and just say, "Hey, I want to get out of my position, whatever, for death, divorce, disease, other types of issue." But this is a month-by-month process. Every single month, there'll be less and less sales and there'll be more and more inventory stack up. And if you add the employment issues on top of that, that's going to make it a lot worse from there as well. So, this chart just describes the closed sales.

You can see here at the bottom, it's down 20.5%. You can see in Jacksonville, this is versus 2019 levels because obviously you want to compare to a normalized level. In Jacksonville, we're down 14.7% in number of closed sales. And in January, the our pending sales are down another 28%.

So, it's not looking good for the future for the number of closed sales for our local market. And that is an indicator that we should continue to see prices fall as sellers start to get the idea of, hey, my house is overpriced. I really need to price at a level that'll actually sell. We're starting to see the distress show up on multiple variations of in of of data sources.

Now, this one is negative equity rate by market. You can see that the rate in Florida is getting hit the hardest. You can see Texas and Colorado, the Northeast is still just doing kind of fine. There's not as much distress in those areas.

However, there's always these markets are unbalanced. It starts in these markets early and then it spreads to the rest of the country over time. But there's a lot of houses that have negative equity now. And those houses that had VA loans, 100% financing, or FHA, 3.5% financing.

Those are the areas that are going to get hit in those new construction communities where they had phase 2, phase 3, phase 4 out there. Those are the areas that we're watching closely because the inventory that they have to compete against the builder. They're offering buy downs of $50,000. That's not even included in these in these negative equity rates.

So the distress is actually a lot more than what this chart is showing. I think over time it will continue to show up. People will start to understand, okay, the sentiment isn't where it is. Again, this is a great thing.

We need prices to mean revert. Of course, after 68% run up in prices in Florida. What do you expect? You got to have some sort of mean reversion there and prices to come down.

And that's what we're experiencing right now. This is comes from the February ICE mortgage monitor. Home price growth slowed to its weakest pace in more than a decade. So, it's not just the United States, it's everywhere.

It's just starting to slow. It's de accelerating. And then I think this year we'll actually end up going negative. In the southern markets, you're starting to see 10% plus of homes already underwater.

So, several southern markets now have 10% plus mortgaged homes that are underwater and that's going to influence the market. This makes sense because frankly the math broke. You can see that in the ratio basis. This comes from Reventure.

US home value to income ratio is near the record highs. Look at what we saw in 2006 and we saw the numbers didn't make sense then. And to get back all the way down to the median of this ratio, home value to income ratio, we need to see a 26.6% drop. Now, my personal financial models show that we should see a 31 to 42% drop from the peak of October 2022 here in Florida.

So, it'll be interesting to see how far prices do come down because I don't expect the incomes of people to to move up to bring this ratio down. I expect the prices to come down. I'd love to hear from you. Do you think at this point in the market cycle you're going to continue to see wages increase at an accelerated rate even with the advancement of AI?

Love to hear your thoughts. Definitely drop them below. And of course, we had this unsustainable growth since 2012. Look at this chart, right?

156,000 used to be the home value, the median home value. Now we're up to 358. And median incomes just did not keep up at all. And so this rate of acceleration of these home values is just completely unsustainable.

And that is exactly why we're in the market that we are in today. Now, there's a big gap between how much you need to buy a house versus the median income and what it actually is. And this is why I like this chart. Right now it says the income that you need to buy a house is 109,000 but the median income that people have for household income is 85,000.

So again another gap there. We're expecting to close that gap. You need about 25% of a decline in home values to make the numbers make sense again. So that's just an indicator that we are overvalued at this point in the market cycle and we're going to see some mean reversion.

Now certain states get hit first. This is obviously from realtor.com. Metro is seeing the steepest home price index declines. South Florida is getting crushed in Texas is getting hit.

Even Hawaii is is getting hit in an area in California. So, these are the places we're starting to see the declines speed up the fastest. This comes from totality of December 2025 data. And we're going to continue to report to you what's going on on the ground.

I can tell you here in Jacksonville, we're not only seeing that the price of homes are coming down, but rentals are also down about 20% across the board across Jacksonville. And the other issue is that houses are sitting vacant for 70 plus days. And that vacancy kills these investment properties. Well, 30% of the people who bought houses over the last few years were investors.

And so that is a huge red flag. The investors could dump their portfolio. We have some people reach out saying, "Hey, I need to get rid of my portfolio. I don't like where we're at in the market.

I can see rents continue to move down. We have build the rent communities. We have tons of multif family. We have a lot of competition across the board.

How do I rent my properties out or get out of them as soon as possible?" So, we could see an influx of investment properties come back onto the market. And look, Florida is the epicenter and often moves first in these boom bust cycles. You can see that the top 10 states with the highest foreclosure rate. Florida is at the top.

South Carolina, Nevada, Illinois, New Jersey, Ohio. So, Florida, especially, South Florida, we're starting to see issues. Florida specifically has a higher investor share. We have more second home exposure.

So, people have their vacation homes here. We have high insurance and HOA costs. These costs have increased 70% over the last 5 to 6 years. Hopefully, we'll be getting some relief in the in the future, but this maintenance cost and these insurance costs are a heavy drag for the real estate market.

There's a heavier reliance on the migration, which we talked about, and there's more rate sensitivities these markets because we have so many investors. So, this is obviously an indicator and a signal, hey, Florida is looking to have some trouble, and we expect this number to move up moving through the the rest of this year. And this data comes from Arbor Data Science. And here's just a image for you to look at.

This is just the picture of Jacksonville's market. You can't even see it. There's just so many active listings on the market for single family homes, condos, and town houses. And I can tell you the town houses and condos are the hardest to sell.

If your house is not perfect condition or priced correctly or or missing one of those two, even if it's perfect condition, it's not priced correctly, it's not going to sell. You have to have it great condition in price to sell with an amazing marketing. There's still 10 to 15 percent of homes that'll get gobbled up like hotcakes because they price them right and they're beautiful properties and those are always going to do very well. However, the ones that get stuck are they're older, they don't have the upgrades and they get severely discounted in this type of market because the next buyer generally does not have the capital or the cash to actually be able to make the upgrades that they want.

So, most people prefer being able to move into a house and not being able not having to change anything and just get what they want from the beginning. Now, here's local for Jacksonville. This is what I was referring to in the beginning. Our median sales price is already down from last year.

We're down 5% from December. So, that's a huge swing right there. Our closed sales are down 8.5% from this time last year from December, 38.8%. So, we are at a really low number of sales.

Median day on market is still okay. It's trending upwards though. Home affordability index is improving significantly. The reason why is because we're seeing mortgage rates come down and prices come down.

This is exactly what we want to see. For me, when I look at the home affordability index, what number I want to see before I start buying is usually around 140. 140 is usually the indicator for me that I want to be able to purchase. But look at this.

This is the big red flag here is pending sales are down 24.5%. And of course, we have new listings that are on the market. This is there's less of them because the lockin effect, right? People have these low rates that they locked in in 2020, 2021.

And even though there's less listings coming on, the month supply of inventory is moving up just because the number of sales is so slow. So, it's a really interesting market. It's dynamic and it's changing every single month. And that's why we're keeping up on the data.

And we'd love to share with you what is going on on the ground so you can make the best decision for you and your family. And of course, if you need a top real estate agent in your market, reach out to me. You can email me below. I respond to every single email.

Happy to get you in touch with somebody who actually knows what they're talking about. Has sold a ton of real estate. You have to understand that 70% of agents, didn't even sell a home last year. Don't get stuck with a weak agent in this type of market.

You need somebody who actually knows what they're doing. And just to drive this home, there's record low number of contract signings across the board, right? So people say, "Oh, you know, it's not slow in my market." Well, it's across the board. Look at this.

This is a record low in December 2025 for the number of pending sales in December. And this is causing the inventory to continue to stack, which will eventually bring the prices down. So, I'd love to hear from you. What do you think of those job markets numbers?

Will they crack the housing market? Where are you located? And what are you seeing on the ground in your market? Drop an comment below.

Love to hear what you have going on in your market and your strategy for today's market. Are you holding cash? Are you going into equities? What are you doing to navigate this market that has so many structural changes coming through through the marketplace?

Thanks so much. As always, you can follow me on Substack and I talk about things there I can't talk about here on YouTube. So, that will also be dropped below.