Serious Cracks Are Showing Up In The Housing Market
Summary
Residential Real Estate: The speaker highlights a sharp drop in existing home sales and argues affordability improvements haven't translated into demand due to weak confidence and labor market concerns.
Sunbelt Housing: Significant price declines and rising negative equity in Florida and Texas markets are described as a potential doom loop that could pressure comps, supply, and further equity erosion.
Commercial Real Estate: Office-related equities are under pressure, with a focus on deteriorating fundamentals and sentiment driving broad selling across CRE names.
Real Estate Services (CBRE): CBRE (CBRE) is cited as tumbling double digits amid a second month of declines, reflecting a grim outlook for brokers tied to weakening CRE activity.
Office REITs: The discussion emphasizes office exposure as a key vulnerability, with office real estate stocks tumbling on structural and cyclical pressures.
US Treasuries: The bond market’s reaction to jobs data revisions and economic weakness is noted, with 10-year yields falling as growth concerns outweigh “dumping” narratives.
Market Outlook: The overall view is cautious, expecting lower demand, potential supply upticks, and tighter credit to weigh on housing and CRE, while falling yields signal broader economic slowdown risks.
Transcript
Hello fellow robo capitalists. Hope you're well. So we have big news out in the housing market and it is ugly to say the least. We're going to dive into what's happening with residential real estate but also also commercial real estate. The commercial real estate stocks are getting hammered today. Let's get right into the details. So, we're going to start by going over to the market watch calendar. And today we had existing home sales come out 3.91 million. Now, I know a lot of you right about now are saying, "Well, George, this doesn't even matter. Are you crazy? It was winter getdon or whatever they call it. It was January getting or I know the weather was bad. I get it. But the thing is that that would have been factored into the expectations, right? It's not like the people that were surveyed, the analysts and economists or whoever they survey didn't know that there was bad weather last month. Also too, I I don't know how much that affects it because as far as existing home sales, I don't know if they do that based on like the contracts that are signed or the actual closings. Maybe you guys know. Let me know in the chat or in the the comments if you know. But assume that it's based on the actual closings. I I Okay, so these are houses that would have gone under contract like at least a month ago or two months ago. It would have been My point is it would have been prior to the big storms. And I I would assume in today's day and age, you don't have to like go down to the local title company to even when I was doing real estate in the States, you could docuign stuff. So I don't I like if there's bad weather, I get it. fewer people are going to go out and look for homes, but the bad weather wouldn't apply to the month prior when people were actually out there looking at homes and signing contracts. You see what I'm saying? And then finally, of course, like I said, [snorts] it it's that would have been baked into the cake and we still were way below expectations. Now, how far below expectations were we? How bad is this number? Let's go right over to the Wall Street Journal. And here we go. Look at the title. Home sales in January posted biggest monthly decline in nearly four years. They say frozen temperature and high home prices. So, how long are we going to keep say talking about high home prices and high mortgage rates? It's like every single time the mainstream media talks about the housing market, they always just have to say that home, but they're not. I mean, they're high, granted, but remember, like 50% of the listings on Zillow have had a price cut in the last 12 months. So, I I I know they're high, but [laughter] in a lot of these markets, they've come down substantially as far as as prices. Okay? And then, you know, they always talk about mortgage rates being mortgage rates are high. Mortgage rates are high. Mortgage rates are well, a they're not historically speaking. They're actually low. And the mortgage rates are down uh quite substantially in the last uh year or so. So, anyway, here's this chart. And by the way, it's this huge plummet, but this number wasn't even that great. I know that was lower than expectations because I did a story on it. So, quick summary, home sales fell 8.4% in January. the biggest monthly decline since February 2022 due to due in part to snowstorms and low consumer confidence. Right. But that would have been baked into the expectation cake and going back to what I was saying earlier with the signings. What I I I I don't know. I get how weather could have played a role. I I don't know that that explains just the huge huge huge miss going all the way back to 2022. Here you go. Uh as I speak, I didn't even read this article, but you know, they're going to say something, but stubbornly high home prices and average 30-year mortgage rates stuck above 6%. Okay, right. But let's [laughter] How long are we going to use the excuse of mortgage rates? For heaven's sakes, let look let me show you what I'm referring to. We'll just go right here. Freddy Mack's website. Look. I mean, hello. Here's the [laughter] last year. We've gone from 6.87 down to 6.09. So, we're down 80 basis points in the last year. So, can you really blame what's happening in January or what happened in January on high mortgage rates? I mean, come on. Why didn't it affect the month earlier or why didn't it impact the month before that? It's just come on. They they make it sound like mortgage rates just in the month of January went up by like 4%. Or something like [laughter] it's just crazy. Look, you go back to 2023 and mortgage rates were 7.79. So they're down 170 basis points since October of 2023. Yet, every single time you hear a negative story about the real estate market, residential, they always point to this. You the more you do this stuff, the more you realize that 90% of what's talked about in economics and the mainstream media and especially on social media, it's all narrative. It's like 90% narrative and like 10% reality. facts and data. And then if they do get the facts and data, they just spin it to whatever fits their narrative. [laughter] [gasps] All right, let's get back to the Wall Street Journal here. Improving affordability should have brought more people into the market. Yes, it should have. The sentiment [laughter] about the economy is not there. Of course, home buying does require some degree of people's comfort level, confidence to enter the market. And let's not forget they have to have a job and they have to be confident that they'll have a job in a year or two. And what we can see is consumer confidence very very low. And then we can also see the labor market really to be kind let's say sputtering. [laughter] And I know we had a a beat yesterday, but if you guys watch my video, you also know that we had to downwardly revise the benchmark for 2025 by 900,000 jobs, which meant that in 2025 there were 400,000 fewer jobs created than they told us before. So take that 130 that we got yesterday with a grain of salt. That's the bottom line. And the bond market, by the way, is backing me up on this one. So, yesterday I talked about how initially the bond market spiked when it saw the beat on the jobs numbers and then it started to come down, down, down, down, down. I'm like, yeah, that's probably because what's sinking in the bond market is all of the revisions. And then we look at what's happening to the bond market today. I mean, look at the 10-year. Oh, that would be down another 7.7 basis points. [laughter] I mean, look, look what happened right here. We go, "Oh my gosh, 130,000 jobs created." And then, oh wait a minute, the revisions are terrible. Then, oh wait a minute, the economy still sucks. Oh yeah, I forgot. Bye bye bye bye bye. Yields go down to 4.1%. [laughter] Oh, [snorts] and not to make fun of the debt deficits and dumping guys. We'll call it the debt deficits and dumping. The people that are always telling you about how the bond market is going to break because of debt deficits and all these foreigners dumping. Remember we had the story yesterday come out about how this huge the world's largest sovereign wealth fund was dumping treasuries. Oh my gosh. And since that time the tenure is down call it 10 basis points because of all the dumping. But anyway, getting back to it here. So let's go back to the Wall Street Journal. Now, I I want to also couple this and we're going to get into commercial real estate as well because there's some big big big news there. But before we do, I'm jumping around here a little bit. Let's go over to this recent story from Market Watch, which I think obviously applies to the existing home sales number that we're just talking about with the Wall Street Journal. More than 1 million home owners are underwater on their mortgage. a 7year high. So now I know a lot of people say, "Oh, a million, that's not that big of a deal. Who cares, right?" But it's the trend. You got to think about the trend. Do you think that, okay, it's at a seven-year high right now and it's just going to stop? Probably not. Between the start and end of 2025, there was a 60% jump in the number of homeowners with negative equity. Let's keep going here. The key talking points. Approximately 1.1 home owners underwater. Okay, we got that. That represents 2.1% of all mortgage borrowers. The number of underwater homeowners increased by nearly 60%. Basically, what this is, you got to draw a line in the sand. So, if you bought your home after, let's say, 2022, you're probably underwater. If you bought your home prior to 20 or let's just say the surveys sickness, you're probably doing okay. You've probably got positive equity. But again, that's a matter of the trend. Which way is the trend going the and the trend is going in the wrong direction. And obviously, if we have the labor market deteriorating, then it makes it almost impossible for people to pay their mortgage. They've got to sell. and those people that are underwater, then that's a short sale. Then that's a foreclosure, whatever it is. And that obviously is going to impact comps, which brings the over overall prices down. And by the way, let's also remember something too that that nobody ever talks about and most people forget that if if home prices are just let's just say flat in your area and there's only 3.9 million in turnover, let's for the month, right? That represents incredibly incredibly low demand. Incredibly low demand. So, if you have demand at all-time lows, let's say, or or close to it, and if you don't have the price going up or if the price, you know, whatever, if it's staying flat, that's my point. That just tells you that all you have to do is get a slight slight drop in the demand or an increase in the supply is probably better way of looking at it. And home prices are going to crash. Home prices are going to are I shouldn't say crash, but home prices are going to go down substantially in nominal terms. Call it I don't know 3 5% in nominal terms nationwide is what I would expect. If you have demand at all-time lows, you could say supply is at all-time lows, right? But demand is at all-time lows as well. So, what's going to increase that demand? Well, it's going to be wages. Okay. Well, the labor market is in distress, is deteriorating. Okay. So, that's not going to help. So, then if you just get a bump in supply, even if it's a small bump in supply, there's not going to be the demand there, right? because we can tell demand is an all-time low. Or else the existing home sales wouldn't be at 3.9 million. Okay, so we talked about this. Why 1.1? Why are they underwater? Because they paid way too high of a price. [laughter] And this is goes back to what I have been saying on this channel for a long time. it it's like people kept saying I I would say look the housing market's in a bubble just it is what it is look at incomes look at prices and people say oh that it doesn't matter the price of my area went up big time you know last year or last six months or whatever it was I'd say yeah okay the prices went up but that doesn't mean that we're not in a bubble like just because the price went up doesn't mean that we're not in a bubble it's not how it works and I would say you just have to ask yourself is it cheap or is it expensive And if you ask yourself that question, there's only one answer. It's expensive. It's expensive. And so the people that ignored that, you know, now they're maybe have a little bit of equity if they're super super lucky, but there's a a good chance that the people that just ignored well that's at all-time high or prices are at astronomical levels relative to incomes, but I'm going to go ahead and buy anyway because I don't know, prices went up last year. Okay, fine. Fine. But now a lot of those people are in this situation. Unfortunately, home values, now I'm going back to the article, home values in the Sunb Belt, which spans southern and southwestern portions of the US have dropped over the past year, which has impacted uh equity of homeowners in these cities. Nationally, home prices rose by 6, which is the smallest gain since 2011. Cape Coral saw the biggest drop in home prices in 2025, followed by Northport, Florida. Austin, Texas. Yet, when you look at it, it's just like all Texas and Florida. All Texas and Florida. Look at this share of mortgages that are underwater. In Lakeland, Florida, you got 10%. Cape Coral, you've got 10%. I mean, that that's that's bananas. And by the way, these uh markets have gone down, but this is like a doom loop because think about it, the reason they are underwater is because home prices have gone down. But because they have such a high percentage underwater, that just puts further pressure on the supply side of the equation because if they're underwater, then what are they going to do? They have to give that to the bank. They fire. have to get out of their balance sheet and the comps go down even further which puts even more people underwater. So [laughter] I mean the bottom line this could improve but it's likely to get worse before it gets better. And again this was totally totally totally predictable if you just would have looked at a chart of incomes versus prices. That's all you had to do. Income's flat, price is way up here, and at some point either prices have to come down or incomes have to go up. And the probability of incomes going up when the yield curve is inverted and then uninverts during a Fed rate cutting cycle, probability very, very low. Very, very low because those lower interest rates don't impact the economy or or don't control the economy. They are a reflection of the economy slowing down. Okay. Clear divide between recent homeowners and those who bought before 2022. I mean, this comes as no surprise. Coming into 2026, homeowners in the US had had nearly 17 trillion in overall equity uh with just under 11 trillion considered tapable. But again, see, be careful what you wish for. Because remember, lower interest rates often don't mean loose money. It means tight money. So even if you have 11 trillion that's tappable, if interest rates really go down because of a deteriorating economy, that 11 trillion ain't going to be tapable anymore, even if the equity is there because you can't get a loan. I mean, I always talk about that my personal story when I had a portfolio of all these rental properties back in 2012 that that were paid for outright. I had no debt against them and I had renters in every single one. They were all remodeled all in a neighborhoods. So I had massive amounts of equity, 100%. Literally millions of dollars in equity. [snorts] And yet I would go to the bank and say, "Hey, can I tap some of that equity? It's tapable." And they'd go, "No, we don't want to touch it with a 10-ft pole." Now, it was all tappable yet not [laughter] because the banks weren't willing to lend against it. [snorts] Vulnerable loans. So, they talk about FHA. I mean, it's no surprise here when you allow people to put 3.5% down on a house. I What do you think's going to happen? And then the shock that they're underwater and that they have to, you know, that they're they have to liquidate, they have to sell if they lose their job or something [laughter] like that. and they lose that 3.5% that they had to begin with because everyone's telling them, "Oh, you got to buy. You got to buy. Oh, home prices, they're always they always go up. The the economy is booming. Just listen to Jerome Powell." Okay, now let's go over to something that's really alarming. If that's not alarming enough, and what I'm referring to specifically is commercial real estate. office real estate stocks tumble as AI disruption and I would look point of the economy as well um start to impact these stocks directly these share prices right so the key talking points here and again is this any surprise is this any surprise going back to the whole Silicon Valley and all that nonsense so key talking points commercial real estate brokers are selling off for a second straight month. CBRE tumbling 13% in midday trading. CBRE's drop is especially alarming given that the only other times in the stock has tumbled was during the survea sickness and the height of the GFC. That sell reflects grim mood as of late in the market which has rotated sharply out of these companies because the exposure to AI. Yeah, I mean I I get it. That's probably like the catalyst, but it's not like the business was healthy to begin with. I mean, the underlying fundamentals were were suffering there. So, it's it it it was teetering on the edge and I think the AI narrative is just kind of what tipped it over the edge. So, these are some of the others outside of CBRE. O yikes. Look at this. It's got That's got to be That's down way more than 13%. Let's see what's happened here. Oh, that's just 13% today because look, just two days ago it was trading at 170 bucks and now it's trading at 130. So that's a $40 drop, more than $40 drop in just two days. So the 13% is basically from like right here, but it was down like the day prior it would have been down by I mean basically let's see 70 50 it would have been down by right around the same. So you get a 12% kick in the nuts yesterday and then a 13% kick in the nuts today. that puts you right in the no bueno zone, my friend. [laughter] So, I mean, it's it's it's it's frustrating from a standpoint of when you do videos on these things if people don't see an immediate cl like as an example, a a softening or a a real problem in commercial real estate. You know, we've been talking about this with the regional banks and everything probably a couple years, but if people don't see an immediate collapse, then they just kind of brush it off and say, "Oh, this is a big nothing burger, George. You're just fear-mongering." I'm like, "Actually, there's a crack in the dam there that you might want to pay attention to." And then all of a sudden, when those cracks get so big that it starts impacting the share price of the company, then everyone's like, "Oh, yeah. Well, boy, no one could have seen that one coming." Well, yeah, you could have if you're just paying attention and you're looking at the dam. But unfortunately, if the dam isn't just bursting with water, you know, flooding the town below, everyone has their back to it and not even paying attention. That's really what happens in markets. And I think that's really what's happened over the last two years. And it happens every single cycle. Every single cycle. This is nothing new. All right, guys. What I want to do is talk about Rebel Capitalist Live quickly. This is the event that I do in May every single year, Orlando. And we are going to have a incredible lineup of speakers. Here you go. Look at this. Well, myself obviously, but we got Kiasaki, we got Darius Dale, Hartman, Brent Johnson, Kenny Maroy, Mike Green, Jeff Snider, Rick Rule, Barnes, just to name a few. We're gonna have a lot more speak. Not a lot. We're going to have more speakers than that. And here's the deal. This is an event you're not going to want to miss. So, you've got to get your tickets ASAP because the closer we get to the event, the higher the ticket prices go. So, you can go to Well, Josh will put a link in the description below and in the chat. And go ahead, check it out. You can see past speakers. You can see the prices here. Uh you can see what we're going to be talking about. And you can get your ticket ASAP because we are living in volatile times. By the way, did you see silver today? And [laughter] down what it was down like 10%. I don't know where it is now. But we are definitely living in volatile times. So to not only hear from these experts when they're on podcasts or when they're doing videos or maybe in the mainstream media, but actually get to sit down and talk to them where they're telling you the unfiltered truth, the their unfiltered opinion on what's going to happen to interest rates, the dollar, gold, silver, commodities. I mean, that's absolutely priceless. And that's exactly what you get to do at Rebel Capitalist Pro. So, go ahead and get your tickets ASAP and I will see you guys in Orlando on that bombshell. Enjoy the rest of your afternoon. As always, make sure you're standing up for freedom, liberty, free market capitalism. We'll see you on the next video.
Serious Cracks Are Showing Up In The Housing Market
Summary
Transcript
Hello fellow robo capitalists. Hope you're well. So we have big news out in the housing market and it is ugly to say the least. We're going to dive into what's happening with residential real estate but also also commercial real estate. The commercial real estate stocks are getting hammered today. Let's get right into the details. So, we're going to start by going over to the market watch calendar. And today we had existing home sales come out 3.91 million. Now, I know a lot of you right about now are saying, "Well, George, this doesn't even matter. Are you crazy? It was winter getdon or whatever they call it. It was January getting or I know the weather was bad. I get it. But the thing is that that would have been factored into the expectations, right? It's not like the people that were surveyed, the analysts and economists or whoever they survey didn't know that there was bad weather last month. Also too, I I don't know how much that affects it because as far as existing home sales, I don't know if they do that based on like the contracts that are signed or the actual closings. Maybe you guys know. Let me know in the chat or in the the comments if you know. But assume that it's based on the actual closings. I I Okay, so these are houses that would have gone under contract like at least a month ago or two months ago. It would have been My point is it would have been prior to the big storms. And I I would assume in today's day and age, you don't have to like go down to the local title company to even when I was doing real estate in the States, you could docuign stuff. So I don't I like if there's bad weather, I get it. fewer people are going to go out and look for homes, but the bad weather wouldn't apply to the month prior when people were actually out there looking at homes and signing contracts. You see what I'm saying? And then finally, of course, like I said, [snorts] it it's that would have been baked into the cake and we still were way below expectations. Now, how far below expectations were we? How bad is this number? Let's go right over to the Wall Street Journal. And here we go. Look at the title. Home sales in January posted biggest monthly decline in nearly four years. They say frozen temperature and high home prices. So, how long are we going to keep say talking about high home prices and high mortgage rates? It's like every single time the mainstream media talks about the housing market, they always just have to say that home, but they're not. I mean, they're high, granted, but remember, like 50% of the listings on Zillow have had a price cut in the last 12 months. So, I I I know they're high, but [laughter] in a lot of these markets, they've come down substantially as far as as prices. Okay? And then, you know, they always talk about mortgage rates being mortgage rates are high. Mortgage rates are high. Mortgage rates are well, a they're not historically speaking. They're actually low. And the mortgage rates are down uh quite substantially in the last uh year or so. So, anyway, here's this chart. And by the way, it's this huge plummet, but this number wasn't even that great. I know that was lower than expectations because I did a story on it. So, quick summary, home sales fell 8.4% in January. the biggest monthly decline since February 2022 due to due in part to snowstorms and low consumer confidence. Right. But that would have been baked into the expectation cake and going back to what I was saying earlier with the signings. What I I I I don't know. I get how weather could have played a role. I I don't know that that explains just the huge huge huge miss going all the way back to 2022. Here you go. Uh as I speak, I didn't even read this article, but you know, they're going to say something, but stubbornly high home prices and average 30-year mortgage rates stuck above 6%. Okay, right. But let's [laughter] How long are we going to use the excuse of mortgage rates? For heaven's sakes, let look let me show you what I'm referring to. We'll just go right here. Freddy Mack's website. Look. I mean, hello. Here's the [laughter] last year. We've gone from 6.87 down to 6.09. So, we're down 80 basis points in the last year. So, can you really blame what's happening in January or what happened in January on high mortgage rates? I mean, come on. Why didn't it affect the month earlier or why didn't it impact the month before that? It's just come on. They they make it sound like mortgage rates just in the month of January went up by like 4%. Or something like [laughter] it's just crazy. Look, you go back to 2023 and mortgage rates were 7.79. So they're down 170 basis points since October of 2023. Yet, every single time you hear a negative story about the real estate market, residential, they always point to this. You the more you do this stuff, the more you realize that 90% of what's talked about in economics and the mainstream media and especially on social media, it's all narrative. It's like 90% narrative and like 10% reality. facts and data. And then if they do get the facts and data, they just spin it to whatever fits their narrative. [laughter] [gasps] All right, let's get back to the Wall Street Journal here. Improving affordability should have brought more people into the market. Yes, it should have. The sentiment [laughter] about the economy is not there. Of course, home buying does require some degree of people's comfort level, confidence to enter the market. And let's not forget they have to have a job and they have to be confident that they'll have a job in a year or two. And what we can see is consumer confidence very very low. And then we can also see the labor market really to be kind let's say sputtering. [laughter] And I know we had a a beat yesterday, but if you guys watch my video, you also know that we had to downwardly revise the benchmark for 2025 by 900,000 jobs, which meant that in 2025 there were 400,000 fewer jobs created than they told us before. So take that 130 that we got yesterday with a grain of salt. That's the bottom line. And the bond market, by the way, is backing me up on this one. So, yesterday I talked about how initially the bond market spiked when it saw the beat on the jobs numbers and then it started to come down, down, down, down, down. I'm like, yeah, that's probably because what's sinking in the bond market is all of the revisions. And then we look at what's happening to the bond market today. I mean, look at the 10-year. Oh, that would be down another 7.7 basis points. [laughter] I mean, look, look what happened right here. We go, "Oh my gosh, 130,000 jobs created." And then, oh wait a minute, the revisions are terrible. Then, oh wait a minute, the economy still sucks. Oh yeah, I forgot. Bye bye bye bye bye. Yields go down to 4.1%. [laughter] Oh, [snorts] and not to make fun of the debt deficits and dumping guys. We'll call it the debt deficits and dumping. The people that are always telling you about how the bond market is going to break because of debt deficits and all these foreigners dumping. Remember we had the story yesterday come out about how this huge the world's largest sovereign wealth fund was dumping treasuries. Oh my gosh. And since that time the tenure is down call it 10 basis points because of all the dumping. But anyway, getting back to it here. So let's go back to the Wall Street Journal. Now, I I want to also couple this and we're going to get into commercial real estate as well because there's some big big big news there. But before we do, I'm jumping around here a little bit. Let's go over to this recent story from Market Watch, which I think obviously applies to the existing home sales number that we're just talking about with the Wall Street Journal. More than 1 million home owners are underwater on their mortgage. a 7year high. So now I know a lot of people say, "Oh, a million, that's not that big of a deal. Who cares, right?" But it's the trend. You got to think about the trend. Do you think that, okay, it's at a seven-year high right now and it's just going to stop? Probably not. Between the start and end of 2025, there was a 60% jump in the number of homeowners with negative equity. Let's keep going here. The key talking points. Approximately 1.1 home owners underwater. Okay, we got that. That represents 2.1% of all mortgage borrowers. The number of underwater homeowners increased by nearly 60%. Basically, what this is, you got to draw a line in the sand. So, if you bought your home after, let's say, 2022, you're probably underwater. If you bought your home prior to 20 or let's just say the surveys sickness, you're probably doing okay. You've probably got positive equity. But again, that's a matter of the trend. Which way is the trend going the and the trend is going in the wrong direction. And obviously, if we have the labor market deteriorating, then it makes it almost impossible for people to pay their mortgage. They've got to sell. and those people that are underwater, then that's a short sale. Then that's a foreclosure, whatever it is. And that obviously is going to impact comps, which brings the over overall prices down. And by the way, let's also remember something too that that nobody ever talks about and most people forget that if if home prices are just let's just say flat in your area and there's only 3.9 million in turnover, let's for the month, right? That represents incredibly incredibly low demand. Incredibly low demand. So, if you have demand at all-time lows, let's say, or or close to it, and if you don't have the price going up or if the price, you know, whatever, if it's staying flat, that's my point. That just tells you that all you have to do is get a slight slight drop in the demand or an increase in the supply is probably better way of looking at it. And home prices are going to crash. Home prices are going to are I shouldn't say crash, but home prices are going to go down substantially in nominal terms. Call it I don't know 3 5% in nominal terms nationwide is what I would expect. If you have demand at all-time lows, you could say supply is at all-time lows, right? But demand is at all-time lows as well. So, what's going to increase that demand? Well, it's going to be wages. Okay. Well, the labor market is in distress, is deteriorating. Okay. So, that's not going to help. So, then if you just get a bump in supply, even if it's a small bump in supply, there's not going to be the demand there, right? because we can tell demand is an all-time low. Or else the existing home sales wouldn't be at 3.9 million. Okay, so we talked about this. Why 1.1? Why are they underwater? Because they paid way too high of a price. [laughter] And this is goes back to what I have been saying on this channel for a long time. it it's like people kept saying I I would say look the housing market's in a bubble just it is what it is look at incomes look at prices and people say oh that it doesn't matter the price of my area went up big time you know last year or last six months or whatever it was I'd say yeah okay the prices went up but that doesn't mean that we're not in a bubble like just because the price went up doesn't mean that we're not in a bubble it's not how it works and I would say you just have to ask yourself is it cheap or is it expensive And if you ask yourself that question, there's only one answer. It's expensive. It's expensive. And so the people that ignored that, you know, now they're maybe have a little bit of equity if they're super super lucky, but there's a a good chance that the people that just ignored well that's at all-time high or prices are at astronomical levels relative to incomes, but I'm going to go ahead and buy anyway because I don't know, prices went up last year. Okay, fine. Fine. But now a lot of those people are in this situation. Unfortunately, home values, now I'm going back to the article, home values in the Sunb Belt, which spans southern and southwestern portions of the US have dropped over the past year, which has impacted uh equity of homeowners in these cities. Nationally, home prices rose by 6, which is the smallest gain since 2011. Cape Coral saw the biggest drop in home prices in 2025, followed by Northport, Florida. Austin, Texas. Yet, when you look at it, it's just like all Texas and Florida. All Texas and Florida. Look at this share of mortgages that are underwater. In Lakeland, Florida, you got 10%. Cape Coral, you've got 10%. I mean, that that's that's bananas. And by the way, these uh markets have gone down, but this is like a doom loop because think about it, the reason they are underwater is because home prices have gone down. But because they have such a high percentage underwater, that just puts further pressure on the supply side of the equation because if they're underwater, then what are they going to do? They have to give that to the bank. They fire. have to get out of their balance sheet and the comps go down even further which puts even more people underwater. So [laughter] I mean the bottom line this could improve but it's likely to get worse before it gets better. And again this was totally totally totally predictable if you just would have looked at a chart of incomes versus prices. That's all you had to do. Income's flat, price is way up here, and at some point either prices have to come down or incomes have to go up. And the probability of incomes going up when the yield curve is inverted and then uninverts during a Fed rate cutting cycle, probability very, very low. Very, very low because those lower interest rates don't impact the economy or or don't control the economy. They are a reflection of the economy slowing down. Okay. Clear divide between recent homeowners and those who bought before 2022. I mean, this comes as no surprise. Coming into 2026, homeowners in the US had had nearly 17 trillion in overall equity uh with just under 11 trillion considered tapable. But again, see, be careful what you wish for. Because remember, lower interest rates often don't mean loose money. It means tight money. So even if you have 11 trillion that's tappable, if interest rates really go down because of a deteriorating economy, that 11 trillion ain't going to be tapable anymore, even if the equity is there because you can't get a loan. I mean, I always talk about that my personal story when I had a portfolio of all these rental properties back in 2012 that that were paid for outright. I had no debt against them and I had renters in every single one. They were all remodeled all in a neighborhoods. So I had massive amounts of equity, 100%. Literally millions of dollars in equity. [snorts] And yet I would go to the bank and say, "Hey, can I tap some of that equity? It's tapable." And they'd go, "No, we don't want to touch it with a 10-ft pole." Now, it was all tappable yet not [laughter] because the banks weren't willing to lend against it. [snorts] Vulnerable loans. So, they talk about FHA. I mean, it's no surprise here when you allow people to put 3.5% down on a house. I What do you think's going to happen? And then the shock that they're underwater and that they have to, you know, that they're they have to liquidate, they have to sell if they lose their job or something [laughter] like that. and they lose that 3.5% that they had to begin with because everyone's telling them, "Oh, you got to buy. You got to buy. Oh, home prices, they're always they always go up. The the economy is booming. Just listen to Jerome Powell." Okay, now let's go over to something that's really alarming. If that's not alarming enough, and what I'm referring to specifically is commercial real estate. office real estate stocks tumble as AI disruption and I would look point of the economy as well um start to impact these stocks directly these share prices right so the key talking points here and again is this any surprise is this any surprise going back to the whole Silicon Valley and all that nonsense so key talking points commercial real estate brokers are selling off for a second straight month. CBRE tumbling 13% in midday trading. CBRE's drop is especially alarming given that the only other times in the stock has tumbled was during the survea sickness and the height of the GFC. That sell reflects grim mood as of late in the market which has rotated sharply out of these companies because the exposure to AI. Yeah, I mean I I get it. That's probably like the catalyst, but it's not like the business was healthy to begin with. I mean, the underlying fundamentals were were suffering there. So, it's it it it was teetering on the edge and I think the AI narrative is just kind of what tipped it over the edge. So, these are some of the others outside of CBRE. O yikes. Look at this. It's got That's got to be That's down way more than 13%. Let's see what's happened here. Oh, that's just 13% today because look, just two days ago it was trading at 170 bucks and now it's trading at 130. So that's a $40 drop, more than $40 drop in just two days. So the 13% is basically from like right here, but it was down like the day prior it would have been down by I mean basically let's see 70 50 it would have been down by right around the same. So you get a 12% kick in the nuts yesterday and then a 13% kick in the nuts today. that puts you right in the no bueno zone, my friend. [laughter] So, I mean, it's it's it's it's frustrating from a standpoint of when you do videos on these things if people don't see an immediate cl like as an example, a a softening or a a real problem in commercial real estate. You know, we've been talking about this with the regional banks and everything probably a couple years, but if people don't see an immediate collapse, then they just kind of brush it off and say, "Oh, this is a big nothing burger, George. You're just fear-mongering." I'm like, "Actually, there's a crack in the dam there that you might want to pay attention to." And then all of a sudden, when those cracks get so big that it starts impacting the share price of the company, then everyone's like, "Oh, yeah. Well, boy, no one could have seen that one coming." Well, yeah, you could have if you're just paying attention and you're looking at the dam. But unfortunately, if the dam isn't just bursting with water, you know, flooding the town below, everyone has their back to it and not even paying attention. That's really what happens in markets. And I think that's really what's happened over the last two years. And it happens every single cycle. Every single cycle. This is nothing new. All right, guys. What I want to do is talk about Rebel Capitalist Live quickly. This is the event that I do in May every single year, Orlando. And we are going to have a incredible lineup of speakers. Here you go. Look at this. Well, myself obviously, but we got Kiasaki, we got Darius Dale, Hartman, Brent Johnson, Kenny Maroy, Mike Green, Jeff Snider, Rick Rule, Barnes, just to name a few. We're gonna have a lot more speak. Not a lot. We're going to have more speakers than that. And here's the deal. This is an event you're not going to want to miss. So, you've got to get your tickets ASAP because the closer we get to the event, the higher the ticket prices go. So, you can go to Well, Josh will put a link in the description below and in the chat. And go ahead, check it out. You can see past speakers. You can see the prices here. Uh you can see what we're going to be talking about. And you can get your ticket ASAP because we are living in volatile times. By the way, did you see silver today? And [laughter] down what it was down like 10%. I don't know where it is now. But we are definitely living in volatile times. So to not only hear from these experts when they're on podcasts or when they're doing videos or maybe in the mainstream media, but actually get to sit down and talk to them where they're telling you the unfiltered truth, the their unfiltered opinion on what's going to happen to interest rates, the dollar, gold, silver, commodities. I mean, that's absolutely priceless. And that's exactly what you get to do at Rebel Capitalist Pro. So, go ahead and get your tickets ASAP and I will see you guys in Orlando on that bombshell. Enjoy the rest of your afternoon. As always, make sure you're standing up for freedom, liberty, free market capitalism. We'll see you on the next video.