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Could this be the worst real estate crash in the last 100 years? But more importantly, are you ready?
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0:00
your home your nest egg your financial
0:03
future it can all vanish in the blink of
0:05
an eye what's coming will make the 2008
0:09
financial crisis look like a minor
0:12
correction the real estate crash looming
0:14
on the horizon will not only affect the
0:17
wealthy and The Reckless it's coming for
0:19
everyone and the worst part there's
0:22
nowhere to hide even real estate giants
0:25
like Blackstone are offloading
0:28
properties at a loss so how did we end
0:32
up here and most importantly what does
0:35
this mean for you and your financial
0:37
future today we are discussing when this
0:40
crash will happen how severe it will get
0:44
and most importantly what you can do
0:46
about it when is the Real Estate crash
0:49
happening the real estate crash is no
0:52
longer a prediction it is our harrowing
0:55
reality and 2024 is the year when it's
0:59
unfolding according to the business
1:01
standard massive buildings like the Aon
1:03
Center in LA are selling at discounted
1:06
prices a 45% discount to be exact yep a
1:11
building purchased for a staggering
1:15
268.7 million in 2014 was just sold for
1:20
$47.81
1:30
even Blackstone the world's largest
1:33
alternative asset manager has defaulted
1:36
on its
1:37
562 million Bond the reason behind this
1:42
crash two factors Stand Out inflation
1:46
and the pandemic preco investing in
1:49
commercial real estate had always been
1:51
desirable I mean if we think back to the
1:55
2008 recession the most significant
1:58
cause of the downturn was res idential
2:00
real estate and in response investors
2:03
pivoted to what was deemed as safe
2:06
commercial real estate because
2:08
businesses would always need a
2:10
playground for their employees and those
2:13
who didn't buy the property outright
2:15
they would rent ensuring continual
2:18
income for lenders and
2:21
landlords but no one could have
2:24
predicted a global pandemic when the
2:27
pandemic hit commercial real estate took
2:30
a heavy blow with people cooped up in
2:32
their homes and working from home office
2:35
spaces were no longer
2:37
needed in a desperate attempt to manage
2:40
the market lenders offered L sees extend
2:43
and pretend contracts these agreements
2:46
gave more time for mortgages to pay off
2:48
their loan with the hope that post
2:51
pandemic it would be business as usual
2:54
literally but that hasn't happened today
2:57
16% of the companies are are fully
3:00
remote and 22% of Americans will work
3:03
remotely by 2024 compared to only 177%
3:08
before the pandemic The New Normal
3:11
normalized the work from home culture
3:13
and let's not forget about
3:15
inflation companies are buckling under
3:18
the weight of continually Rising
3:21
interest rates making their short-term
3:23
lows incredibly expensive there is no
3:26
immediate light at the end of this
3:28
Tunnel real estate invest
3:30
and Equity Fund manager Grant cordone
3:32
said that this is the biggest real
3:35
estate correction of his lifetime
3:37
suggesting that the 2008 crash was not
3:40
even comparable how severe is the crash
3:44
there will be bank failures this is a
3:47
problem that we will be working on for
3:48
years more these are the comments made
3:51
by Federal Reserve Bank Chief Jerome
3:53
Powell and there have been bank failures
3:56
and we're not only talking about the
3:58
crash of local and Regional Banks we are
4:01
seeing those too but we are talking
4:03
about the collapse of what is regarded
4:05
as the biggest bank failures in American
4:07
history the failure of banks such as
4:10
First Republic Bank and Silicon Valley
4:12
Bank which both had $232 billion and $29
4:18
billion in assets respectively when a
4:21
bank fails we will see more caution in
4:24
the banking system typically from
4:26
smaller Banks you know those ones who
4:28
serve ordinary amerit am an they may
4:31
Implement stricter lending strategies on
4:34
loans mortgages and even credit cards
4:37
accompanied by potentially higher
4:39
interest rates this will significantly
4:42
lower spending power holding rapid
4:45
economic
4:46
expansion here's the thing with the
4:49
continually Rising popularity of work
4:51
from home culture and unrelenting
4:54
interest rates it doesn't make sense for
4:56
mortgages to refinance so commercial
5:00
real estate will continue to fail and
5:03
this isn't just the US problem one of
5:06
China's most prominent developers
5:08
evergrand has been ordered to liquidate
5:11
its $240 billion worth of assets to
5:15
repay its $300 billion total liabilities
5:19
but make no mistake amidst the turmoil
5:23
there's a shift on the horizon what can
5:25
you do major investment firms are
5:28
defaulting banks are are failing and the
5:31
market sentiment sits at extreme fear
5:34
with all these unfolding it backs the
5:36
question should you pursue real estate
5:39
should you even get licensed as an agent
5:43
the answer may surprise you but it is a
5:45
resounding yes bear with me for a moment
5:50
the current market crash is focused on
5:52
Commercial Real Estate while we may be
5:55
seeing price drops in the residential
5:57
Market some metros are also experiencing
5:59
in incredible price increases the
6:03
significant decline is in the commercial
6:05
sector secondly whether a company sells
6:08
a discounted price or an investor buys
6:11
both parties will likely need an agent
6:15
in fact a market crash should increase
6:17
the demand for knowledgeable real estate
6:20
professionals think about it when a
6:22
company is selling at a discounted price
6:25
it needs someone who can protect its
6:27
interest it's already taking a hit on
6:30
value doesn't want to reduce its price
6:32
any further this is why GL brokerage a
6:36
prominent Real Estate Services and
6:38
investment company has been appointed to
6:40
resell blackstone's $38 million debt on
6:44
the Manhattan office tower on the flip
6:47
side investors need skilled negotiators
6:50
to drive the price even lower push it as
6:53
far down as they can and this is where
6:56
you come in to thrive in this new
6:58
landscape real estate agents should
7:00
focus on three key areas number one
7:04
increase your knowledge of commercial
7:06
real estate understand the nuances of
7:09
different property types zoning laws and
7:13
market trends specific to commercial
7:15
spaces as an agent staying informed
7:18
about these developments is crucial by
7:22
keeping your finger on the pulse of the
7:23
market trends and policy changes you'll
7:26
be better positioned to help your
7:28
clients navigate this changing and
7:30
challenging landscape number two improve
7:34
your negotiation skills in this volatile
7:37
Market the ability to broker deals that
7:41
satisfy both parties is more important
7:44
than ever track and review every
7:47
negotiation you have been involved in
7:50
whether as the agent or in a learning
7:52
role and ask yourself what can improve
7:55
from it and find ways to build trust not
7:59
not just with clients but with the
8:02
opposition try to understand where they
8:05
are coming from empathized and always
8:09
show genuine interest let them know you
8:12
are actively listening and above all
8:15
dissolve any Mis understandings this
8:18
will show the countering team that you
8:20
are not just after a sale but you are
8:23
keen on a favorable outcome for all
8:25
parties involved number three Ure sure
8:29
you can provide clients with the best
8:32
value this might mean expanding your
8:34
services leveraging technology or
8:37
forming strategic
8:39
Partnerships understand what the market
8:41
needs and the person providing
8:44
it the real estate market is evolving
8:48
and those who evolve with it will
8:51
succeed it's as simple as that turbulent
8:55
times are ahead no one can deny that
8:59
however
8:59
real estate will continue to be one of
9:02
the best investments and not only for
9:04
investors but also for families meaning
9:08
real estate agents will be needed and if
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there's one thing that the 2008 crash
9:14
taught us is that we are way more
9:17
resilient than what we think position
9:20
yourself as an authority grow your
9:23
network and keep your eyes on the
9:25
horizon we will need to learn how to
9:28
repurpose property and change our
9:30
overall outlook on real estate but one
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thing's for sure as long as men walk the
9:35
earth shelter will be needed are you
9:38
wondering what's next for the American
9:40
economy hit that subscribe button so
9:43
that we can keep you in the loop as the
9:45
market shifts
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