Todd: Hello. Welcome to Todd Miller TV, joined here today with Oana. The question that I get everyday – I just got it today from somebody who called – is, “Is the market going to crash in a couple of years?” That’s what they’re saying is if prices go up, that means it’s going to crash. So anything that goes up has to come back down. So what do you think about that?
Oana: Well, this is like a balloon Will Home Prices go up?. What goes up must come down.
Oana: OK. Look, the market is going to do what the market is going to do. The market is cyclical. It’s going to go up. It’s going to go down. Will it go down as far as it went down before? Unlikely. Most of all, remember about the difference between your actions and what happens in the market.
Todd: OK, that’s the important one.
Oana: That’s the most important thing. Look, people make money when the market goes up. People make money when the market goes down.
Oana: It’s a matter of what are your actions. What are you doing? You can make money in any market and there are people who make money in every market. Not just in any market but in every market. So it’s a matter of being aware of what’s going on and staying a little bit ahead or even with it. That’s fine. You can still make money.
Todd: What do you think about somebody who says they’re going to sell their properties because they bought them two years ago and they’ve made money and they just want to sell them? Will Home Prices go up?
Oana: Perfect. Give me a call. I will be happy to list them and sell them for you and somebody else can take advantage of the appreciation. It’s all good. Give us a call.
Todd: OK. What about investors who are getting – mailbox money is what I call it. They own two or three properties. Do you know anybody or what are your thoughts on taking home equity lines on those and then using that cash to buy more properties? So your cash flow is going to maybe change a little but you’re going to have more exposure to the upside.
Oana: It makes a lot of sense depending on what your financial situation is.
Todd: OK. Will Home Prices go up?
Oana: So it’s a very broad question because everybody’s finances are different but in theory, yeah, that makes sense because obviously the more properties you control, the more outside potential you have and also the more revenue you’re going to have from the different rent income.
Todd: OK. So what leading indicators to the market crashing – everyone is talking about all these foreclosures. Are you saying – what have you seen for the last couple of years with the number of foreclosures since you get them directly?
Oana: OK. Foreclosures have been pretty scarce for the last couple of years.
Todd: OK. Will Home Prices go up?
Oana: They’ve been scarce for a lot of different reasons and that’s probably another video right there.
Oana: But the bottom line is foreclosures have been pretty scarce. Inventory is scarce which is causing prices to go up. But I think another reason why prices are going up is people have cash and real estate has traditionally been a great place to park your cash because no matter what the stock market is doing out there and even what the real estate market is doing out there, so long as you have a tangible asset, such as a house, that you can either live in or rent out and get income from, that makes sense.
So there’s a lot of cash in the marketplace. We’ve had I think two or three years now in a row where most of the sales had been cash purchases and that tells me there’s still a lot of cash out there.
Todd: OK. Yeah, I think that’s to me the best leading indicator. If people are still coming in with cash, they don’t think there’s a lot of risk. Will Home Prices go up?
Oana: Right, or that the risk is not in the real estate market. This was elsewhere and that’s why they’re choosing real estate as a place to put their cash.
Todd: I agree. OK. Two year outlook. Where do you predict we are for prices? Same as where we are, less or higher? Will Home Prices go up?
Oana: I think prices will be higher two years from now.
Oana: I mean hands down. I can’t imagine that they’re going to go down. The slowdown will definitely occur. We certainly cannot maintain 20 to 27 percent appreciation year over year but I really doubt that we’re going to see depreciation in the next two years.
Todd: HousingWire did an article. Seventy-five percent of people said that they would be better off buying a house today than waiting a year. Will Home Prices go up?
Oana: And that’s absolutely true for a lot of reasons. Reason number one, interest rates are still ridiculously low.
Oana: So your money is going to go that much farther. Reason number two, we have that appreciation. Prices do not appear to be going down. Even if prices stabilize, you’re still better off buying a house today than a year from now because there will be some increase between now and a year from now. So it makes a lot of sense to still buy a house today.
Todd: Good. All right. So I thought I would share Will Home Prices go up with you. That’s Oana’s take and my take on the next couple of years. We get the question all the time. I thought we could do a video on it. That’s my update for today and hope to see you on another video. Thanks.