Reventure Videos

2021 Housing Bubble: Best v. Worst Cities

The 2021 US Housing Market is in a BUBBLE. But the coming CRASH won’t impact all cities equally. Some housing markets will lose 30% of their real estate value. Others will sustain prices at current levels. How do you tell the difference? And how will a potential Capital Gains Tax increase impact things?

Home owners and real estate investors who are concerned about buying at the top of the 2021 Real Estate Bubble need be using data to enhance their decision-making. Questions like: “Is now the right time to buy?” and “What are the best places to buy?” are more easily answered with data on your side.

In this video Reventure Consulting shows you how to use two key metrics:

1) Value/Earnings Ratio

2) Rental Yield

To identify which markets are RISKY investments heading into the 2021-22 Housing Crash and which ones are more SECURE.

The markets that will likely perform the best in the crash? Low Value / Earnings, high Rental Yield markets – think Buffalo, Birmingham, El Paso, Rochester, Pittsburgh, Oklahoma City. These markets aren’t very sexy, but they weathered the previous crash well and have the best attributes to weather the next one.

Housing Market Crash: Tech Collapse (Pt. 3)

In Part 3 of a three-part series, Reventure Consulting explores why PropTech is accelerating the real estate bubble and will responsible for its eventual collapse. Companies like Zillow, Realtor.com, and Rocket Mortgage started the PropTech revolution in the late 2000s. Since then many imitators have followed suit, the number of and the financing of PropTech startups reaching record levels in 2021.

In fact, the amount of Venture Capital investment in PropTech companies increased by 4x from 2016 to 2020 ($2 billion to $9 billion)! These companies make the home-buying process easier, connecting buyers to sellers more easily and ultimately lowering the amount of time homes spend on the market. This impact accelerates price appreciation during a Housing Bubble.

But it will also expedite the decline when the Housing Bubble pops! PropTech startups like Orchard and Pacaso are doing their part to destabilize the real estate market, by providing easy financing in Orchard’s case and liquidity in Pacaso’s case to a housing market that is already inflated.

The behavior and business models of these companies is eerily reminiscent of how banks and mortgage companies acted in the 2005 and 2006. We all know what happened next.

Housing Market Crash: No More Buyers (Pt. 2)

In Part 2 of a three-part series, Reventure Consulting explores why current home-buying demand has already peaked, and is set to decline in the coming months.

Most of the home-buying demand over the last year has come from high-earner, high-credit score households converting from renters to owners. These households have good jobs and haven’t been as impacted by the K-shaped economic recession, allowing them to get a loan and purchase a home even in uncertain times.

The problem is that there is a limited supply of these high-earner buyers. At some point soon the burden of home-buying demand will shift to lower earning, lower credit score households. This is where the Housing Bubble will burst. Strict lending standards and increasing prices will make it very hard for these low and middle-income households to participate in the home buying spree, which will deprive the housing market of demand.

Moreover, the US Home Ownership Rate is already at an elevated level of 65.8% (historical average of 64%). Just how much more runway does the Housing Bubble have when such a high percentage of households already own their home?

Housing Market Crash: Inventory Deluge (Pt. 1)

In Part 1 of a three-part series, Reventure Consulting explores why current housing inventory is so low. And why that low inventory is a temporary situation, caused by a shortage in home listings in the midst of the COVID crisis. The US Housing Market is short 1.1 million listings over the last year compared to previous years. That’s 1 million fewer people who have listed their home for sale than normal.

The key question is: how long will these people continue to put off listing? The answer is likely not for much longer, as record prices will begin to push some of these deferred listings onto the market. That will increase active inventory and provide much needed relief for the housing market.

But that’s not all. The other positive development is new housing supply. Home builders and developers have pulled permits for a record amount of new housing units in recent months. The current levels of permitting match some of the peak years prior to the Great Financial Crash in the mid-2000s. This means that we’ll be seeing even more new home inventory hitting the market in late 2021 and early 2022, helping to pop the housing bubble that is sweeping the nation.

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