Florida's Real Estate Challenges and Solutions | 1-Minute Market Update w/ Martin

While there is a small increase by 3% in mortgage applications this week compared to last week , it's still way lower than it was this time last year , by 4% . Even though fewer people are applying for mortgages , more people are searching for homes online . In fact , google searches for homes for sale have gone up 6% compared to last month .

Now let's talk about home prices . The average price of a home is still pretty high , javi . It's currently at a whopping $389,500 , and the prices that sellers are asking for are even higher , at an average of $393,700 . So if you were to buy a home now , your monthly mortgage bill would be pretty high too . That's because interest rates are at 6.35 .

So the average monthly mortgage is now 2534 . I want to say something about this real quick . You know , in 2007 , when I bought my first investment and I was a mortgage broker , the interest rate was 7.75 . 7.75 . So when we look at these rates 635 , bro , when I bought my first house in the year 2000 , we had an FHA loan .

Take a freaking guess at what my mortgage rate was . Just take a wild guess , bro . Take a guess Double digit , bro , close , very close . We're going nine and a half , you're close . $9.75 , dude , $9.75 . While that was only a $176,000 mortgage for a three-bedroom , one-bathroom Cape Cod . The mortgage payment back then , dude , was $21.53 a month .

Two kids right , my wife and I were kids . We're two kids , a third one on the way , and I was on a commission job . So when I look at these rates , when I hear these rates 6.35 , blah , blah , blah is high . The problem is that it's high compared to the prices . So that's the problem the price and the rate is high . That's what makes it unaffordable .

Continue on with the data here . This week . There are more homes available for sale now compared to last year . The number of new homes on the market has increased by 3.7% and there are almost 16.6% more homes available to buy overall . So that means inventory is up . Lastly , homes are taking longer to sell compared to last year .

On average , a house is now on the market for 36 days .

But you see , a lot of people right now they're holding on to that equity because we've been in that period for the last couple of years and it's sobering for a lot of people .

But I think what we're seeing right now more than anything is , I think , that there becomes that point that somebody's going to say , of like , yo , I would rather take a little bit less for my house .

Or , to be honest , I think that there's some creativity that's happening in the market and homeowners are starting to wake up a little bit more , so to say , I'd rather take a little bit less on my house and maybe sell it with the mortgage or something of the sort , before more homes get on the market .

Because I mean , with all of these numbers , I don't see where home prices are going to go up at all , because I think when interest rates go up or go down , I think there's going to be more homes on the market . Man , what do you ?

What I think will happen is , in my opinion , is that I think prices are going to flatten out on the resi side , so on the residential side , I think we're going to see flatline . We're going to see prices flatline here over in 25 . I don't think in 2025 that the market is going to pick up . The real estate market is a slow moving behemoth .

So one of the things I think that we're going to end up seeing right now is I think that we're actually going to see a tremendous amount of supply start to hit the market , and those are the two things that you have . It's a supply and demand market .

The demand's really slowed , but I think , when interest rates do go up , I think that we're going to start seeing neighborhoods for sale because neighborhoods have been bought up and not because the interest rate numbers still don't even work .

Even in a half a point , even at a full point reduction , you still can't make these rentals on a single house by house basis work . So that's just my prediction . Maybe it's a little doom , maybe it's a little gloom . You pair that on top of people getting laid off with AI , other technological advancements there's been some overhiring in the last couple of years .

I think that we're going to start to see a lot of assets come and start to hit the market . But I think a smart homeowner is going to be able to leverage , maybe , if they have a lower interest rate or something like that , being able to work out a good deal so they don't get hit so hard . But man , I go back to that . I go to supply and demand .

I think that a lot of people right now that they've been on the sideline for so long , whether being an owner or being a buyer but I think the big sleeping giant right now that we have are a lot of these companies . We've already seen a couple property managers this week .

You and I we've been offering a lot of family deals in what's been the general consensus Asset managers from New York , right .

So I think a lot of people are coming to wake up to realize of like , yeah , that second that they can try and make something , pencil right , they're going to be hitting the market , driving demand up tremendously , plus a lot of homeowners .

For me I'm going to make a little bit of a dramatic prediction , but I think prices are going to get cut by about 50% right now that we're going to see .

And , bro , you know what unemployment was back then ? 20 , 25% , bro . You know what unemployment was during 2008 ? It only hit 10 percent . Right now , our unemployment is up to 4.3 percent . Now , remember they revised the numbers by about a million right , 800,000 less job created than what they reported . Anyways , I know that's the biggest threat .

It doesn't matter if we have a shit ton of of inventory out there . It doesn't matter if we have a ton of demand out there . Neither matter if people don't have jobs and can't pay . None of it matters . The whole economy collapsed , everything collapsed .

So we've got to make sure we keep people employed J-PAL , listen to random guys here on a podcast and on YouTube and lower the freaking interest rates . They're always freaking late to the party .

The two new developments that are underway there's a big one that's a 360 unit called 7th and Pleasant Valley , and a smaller one with 44 units , 1307 and 1309 East 4th Street so both are going to require tearing down some old buildings to make way for these new apartments .

But this is really interesting because even though their rent prices have been going down in Austin lately , there's still a high demand for apartments . Overall , it looks like these developments are betting that there's going to be plenty of renters looking for a place in East Austin . Maybe it's homeowners that are selling .

They're going to want to downgrade capital assets and equity that they have in their house .

There's a lot of the new single family stuff that is dropping . I think they're stabilized now , but my thought process on this particular article is that it's a good bet , man , I believe 6 to 11 million new immigrants in our country , whether illegal or not . There's still people we have to figure out . I mean , they're already here . What are we going to do ?

We got to figure it out , so there's going to be a demand for that . A lot of those people are going to go to these big cities , austin . Here's one thing , though , I noticed in Austin I'll share this with you is I noticed that if they're not careful , it's a great city , great Texas , it's a great state for investing In Austin .

Though , what I noticed and this could have changed when I was there in 22 , walking around , because I was in downtown Austin was I started to see some issues with homelessness , like in some of these big cities and homelessness .

You , as a developer , know that if you're developing a beautiful building or you're redeveloping a beautiful building and you have a lot of homelessness around your property , that can create some challenges .

And I think the more times that we see these homeowners that maybe are sitting in $100,000 , $150,000 , $200,000 worth of equity that are in their home , I think it makes a really compelling story for you to sell your property and move as a rental . And also Austin you're right . I mean it's one of the top job markets in the entire United States .

You have California pushing down , you have Mexico pushing a lot of people who are going into Texas right now . You also have a bunch of other states that are pouring into the city , whether it be for business or whether it just be for lifestyle . I know I just had a buddy of mine move from Colorado into Texas , right , for the exact same reasons .

So I think also one of the things on here as well is that Austin probably has a little bit lower cost of living where you can get into , where it's just

. I think we're going to continue to see a pouring of people into these major metropolitan cities . I was just in Dallas . I saw the homeless thing as well . I've been forced and go yeah , it's all , it's all over these places . But I think one of the things that you get , not , brother ?

I was down there last weekend with my wife in downtown Tampa and it's not that there's no homelessness . I saw maybe one or two , but man , one or two compared to what I've seen in the other big cities . This guy in Florida is doing an amazing job . With that Doing an amazing job , you got to give it back .

But I think the thing that we're going to continue to see is , I think that these apartment buildings are going to continue to thrive versus maybe that , instead of seeing these like a massive buying of these single family residences because I think that you get this quality control with these apartment buildings , so not only are you just paying for housing , but you

get the amenities , you get the protection . Maybe you get some security guards where you can get your mail protected and stuff like that .

So I think we're going to continue to see , as rates go down , where these apartment buildings go up and , I think , cities like Austin we're going to see , maybe the early stages over the next couple of years , what the best investment strategies are going to be across the market .

I don't have my crystal ball right now it's a little low on battery , but just kind of looking at Austin , austin's been leading the curve for the last couple of years . So it's going to be pretty interesting . Maybe we could take something from there over here . Yeah , we'll see . We'll see how that goes , cool man . So we got another residential story .

Our good old buddies at the NAR , the National Association of Realtors , are fighting back against the Department of Justice , attempt to reopen an investigation . So the NAR , the National Association of Realtors , is taking a stand against the Department of Justice , the DOJ , after a recent court ruling allowing the DOJ to reopen a closed investigation .

The DOJ previously agreed to end its investigation into the NAR's policies in exchange for certain changes . So , however , the DOJ later decided that after closing it , they wanted to revisit the investigation , arguing that it could also do so unilaterally , even after they closed it , which doesn't really make too much sense .

But I guess the Department of Justice does what the department wants to do . So the NAR is pushing back on this . They disagree with the DOJ's interpretation of this agreement , believing that the government should also hold to its own word , which would be fantastic .

But the association's concerned that the ruling could have a broader implication for other businesses that enter into agreements with the government . So now the NAR is actually seeking a hearing of the court's decision determining to defend its members' interests . I mean , man , this is going to be something that having affects a lot of businesses here .

What do you think about this ? You know , the government going back on what they agreed to .

This is how I'm modeling . This is how my model of the world is seeing . This is through my filter , how I'm seeing it .

That had nothing to do with the Department of Justice . The Department of Justice actually stepped back from there and it's reopening after and now this is actually basically it's the same thing that had gone on before . Right , it was the same issue , but instead of the government suing the nar , it was actually the people suing the nar .

Now that the people have finished that , now , oh , I got it , I got you . Okay , right , so this is yeah , so this is it's reopening the investigation related to the change in broker commission specific I . It's been scrutinizing NAR's policy , including the participation rule , which is the seller's offer to a commission buyer broker through the MLS right .

So the NAR recently settled the class action lawsuit , like we just said , for 418 million , and it's centered around those practices leading to the changes that we've seen in regards to broker commission , what's disclosed and negotiated . So they've made those changes , that DOJ is continuing to investigate whether these or other practices might still violate antitrust law .

I got it , I got it . This is the crazy part , because the NAR lawsuit , the class action lawsuit that just happened with realtors .

So now by the DOJ stepping in , it could go to mortgage brokerage , it can go into insurance , it can go into all of these other competitive environments and landscapes that people have for competing for brokerage , compensation and stuff like that .

The first one , man that looks like that , was just the cupcake at the birthday party right Dude , half a billion dollars is not a cupcake in a birthday party my brother . I could become 418 billion once you get a couple industry-wide . This is just realtors . Yeah , this is a big deal . We've already seen how much it's shaken up . Rm .

But when government starts to overreach too much into then over-regulating industries , then it cramps entrepreneurs from innovating and doing , because now you got all of these extra rules that you're not letting us innovate , you're not letting us be creative , and that often creates a lot of time .

Like , look , man , I just came from a conference , as you know , and one of the biggest thing is right , like man , I've been to hundreds of business conferences and one of the biggest thing and read hundreds of books on business . What's one of the biggest things that entrepreneurs do ? Right ? We innovate , right , we innovate right , we innovate , we're creative .

I believe in capitalism , I believe in America , I believe that we is the entrepreneur that fixes the big problems in the world of the world . We're traveling to space like Elon Musk electric cars . Look at all of the things that entrepreneurs do . Entrepreneurs are the ones that are going to cure cancer . It's entrepreneurs the ones that build roads .

It's entrepreneurs the ones that build houses . It's entrepreneurs that fix the big problems in our society . When government um wants to get and stifle that and get too involved in that , it creates a problem and it um it can , it could not saying it is it could hurt innovation and other news . New safety laws send Florida condo market spiraling .

So you've been in Florida for a minute , so I really love to get your input on this . Florida's condo market is in trouble . Costs are going way up thanks to the new law that requires safety checks on older buildings . Condo owners now face big repair bills and rising HOA fees , making it expensive to own a condo .

This is scaring away buyers and costing some homeowners to sell at huge discounts . Experts worry this could lead to a domino effect , condo associations going bankrupt , property values dropping and a mass exodus of residents . So if you're thinking about buying a condo in Florida , you might want to wait and see how this shakes out .

It's really tough to be able to wrap your head around the actual numbers with this , because we're talking about one of the states that has the most coastline , so we have so many condos on the beach that are high risk areas and you have a lot of people who've been in retirement so , like hey , I don't know how a lot of people are going to afford this .

I'm excited because I think this is a great buying opportunity for us . We would have some properties on the beach . But , man , I know a bunch of my buddies who are in construction and they've been telling me about this and the amount of repairs that needed to get done and just a lot of delay in it .

But I think that this is a deeper problem that we've had , that the associations that you have , whether it be an HOA , whether it be a condo association I'm from Washington DC and that was one of the biggest laws that we ever had to write within it that are a condo association's responsibilities .

I mean , we're basically looking at neglect and it's surprising to me because I know as of recent right so if something that's been built after 1985 , florida had a law that normally the actual development would fall on the developer's responsibility . So that's actually something when you develop a building in Florida , you're actually supposed to carry that .

So I think for newer condo buildings , right , you're going to be able to see this not be as much of an impact , but something that is pre-1985 , that doesn't have that level of protection , right , doesn't have any bond , doesn't have any insurance , doesn't have that backing .

I mean , this could be catastrophic , could be a great opportunity , right , you could buy these buildings at pennies on the dollar because it could technically get foreclosed on in a couple of different situations here . But , man , to be honest , I don't know how somebody is going to recover out of this . This is something that you can't just look the other way .

Buildings need to be repaired . Hurricanes are just getting stronger here . They're structural , there's mechanical involved , there's so many things like windows that are involved , and these are cheap fixes and especially , you know , and especially with insurance going up . I think that this is something you know .

Desantis has done a great job , but we haven't heard anything about this . We haven't heard anything in regards to the state help with this , and I see that homeowners are getting beat up . Man , but what's your take on this man ? You know you're a new resident here in Florida . You bought a house .

You know I'm glad you didn't buy a condo here in Florida , you bought a house .

for me , not a little bit . This is heartbreaking for those retirees , a lot of retirees in the state that have come here and moved here to retire . So you think about it . Let's say you're on a fixed income $60,000 a year or something and you've been living in your condo .

You don't have to worry about grass and all of these things , all of the good things that come with living in a condo . Right , as you get older and you age in , you age up , you don't want to be dealing with all those things . All those things are taken care of for you and all of a sudden , just like that , your HOAs go up and then your fees go up .

I've seen some videos and some data where these things are going up by $1,500 a month , $2,000 a month because of all of the repairs and everything that has to get done now and it's like , dude , that's heartbreaking for a couple , a senior couple , a grandma and grandpa that retired in Florida . Where are they going to get the $2,000 a month from ?

That's where my heart goes out to right , those families that are out there that are living in these condos and they have maybe two or three kids you know , young kids such as yourself and two incomes , working and voila , they get hit with this , bro , not everyone can handle that . So my heart goes out to those folks .

And again , do you think the government is going to come in and fix ? Again ? Do you think the government is going to come in and fix this ? Do you think the government has the capacity to come in and fix this ?

I think in January I think it's going to get very hot right , but I think probably sometime next year I think they're going to come to step in to say , hey , this is something that's affecting a lot of our residents .

So I think that they're probably going to start to maybe write some legislation that is a condo relief program and I really don't doubt , especially for some associations that either can't afford it or homeowners . I think that there's going to be a certain threshold that we're going to see post-election this year .

I think we're going to start to see a lot of relief that's going to be coming in from the state side and , thankfully enough , our state government has done a pretty good job from at least from what I've heard from DeSantis and everybody being able to have a reserve for these .

I know something that they wanted to do is be able to have a lot of civil programs or roads and stuff . I think they're probably going to end up diverting a lot of that because there are residents right , these are people who've been here for a very long time who can't afford it .

So I wouldn't be surprised if either we see some lawyers be able to start to step up on this and start getting some representation for people , or if there's going to be a state fund program that starts to come and bail out some people who are in really dire situations , because we have a lot of these apartments , man , they're 40 , 50 years old and they do

need some work and really people look the other way . But the last couple of years we've noticed the flood insurance and a lot of these flood programs and building programs start to get a lot more restrictive because they want things to be built right for the long term .

But , man , I do have faith that our system is going to come to the rescue in this , but I don't think that we'll see something , probably for the next year or so . I think it's going to get a lot worse before it gets better , yeah , and I hope so , man .

The last recession in real estate . This , right now , this moment , guys , and I'll tell you this , javi , in 2016 , I looked back and I said to myself man , I screwed that up . I wish I would have known then what I know now , because I would have taken advantage of all the opportunities . Guys , if you're listening , don't be that person .

You know , I have an online course . You guys could check , check out martinreimasterycom and you could start getting your education right now . This opportunity right now that we're seeing in real estate is a tremendous opportunity . I'm going to just put a shameless plug for myself there martinreimasterycom .

The other thing is , I really would love to get some feedback from you guys here , as I am going to be starting a fund so we can take advantage of this opportunities that here in the Tampa Florida market and some other markets in the area . We're going to be starting a fund really soon . We're preparing , we're talking to the attorneys .

What I would like to get is I'd love for you guys to drop me in the comments , let me know , if we start a fund , if you'd be interested in partnering up with us in some redevelopment apartment multifamily redevelopment , value add type of things and be our partners . This is not a solicitation or an invitation .

This is when we have the documentation ready and the legal documents ready . I'd like to know if you would be interested in partnering up with us and investing in our fund when it is ready . That's all it is . We're going to make sure it's legal , it's done the right way . This is not a solicitation . We are not taking people's money .

When it is ready , just let me know and say yes , and I'd love to just get on a quick call with you and get your thoughts and see what your goals are so that , when we are ready , we can make the offer to you . Any final thoughts before we wrap it up , javi .

Warren's been in this game for so long . We're here for you . We're here to add value to you and your businesses . So the biggest mistake that you can do is sit on your hands and watch everybody make money while you're not . Reach out . Participate . Let's get wealthy together .