On The Market

America could enter what nobody wants—a “lost decade.” No huge gains, no massive price drops, just a slow, stagnating market where ⁠inflation⁠ eats away at the returns we once thought were normal. ⁠Stocks⁠ are already massively overpriced according to the CAPE Ratio and the Buffett Indicator, ⁠real estate⁠ is unaffordable and already seeing real price declines, and ⁠commercial⁠ has fallen off the proverbial cliff. Can we go up from here? The argument isn’t looking optimistic. So, if it’s about to be a whole lot harder to make a return on real estate, in the stock market, or anything else worth buying, what should you do? Today, Dave breaks down America’s “lost decade” and what to do to protect your wealth from inflation erosion that looks more likely by the day. There are ways to maintain strong real estate returns along the way, but most investors take the easy route and fail to profit because of it. You can escape this “lost decade,” but only if you’re prepared for it.

For years, we’ve been told that the United States is short millions of homes, and that building more units is the key to solving the affordable housing crisis. But a 2024 study from Kirk McClure and Alex Schwartz reaches a different conclusion and suggests that the ⁠housing shortage⁠ narrative may be built on a shakier foundation than we’ve been led to believe. Kirk, professor emeritus at the University of Kansas, joins today’s show to dig into the actual Census data gathered from 2000-2020 and whether it really points to a nationwide shortage…or something much different. If we don’t have a supply problem, why are homes and rents still so expensive? Should policymakers rethink their push for ⁠new construction⁠? And where could government dollars have the greatest impact? We’ll unpack the implications of Kirk’s findings, why ⁠home prices⁠ can remain elevated when there are millions of vacant homes available, and whether today’s housing policies are actually helping the people who need it most. These answers could upend how we think about the housing crisis and give ⁠real estate investors⁠ another perspective on where the market might be headed.

AI could lead to an extinction event, but don’t worry, the stock market will be hitting all-time highs on the way there! We’re entering a new phase of the ⁠artificial intelligence⁠ race where now CEOs from OpenAI and Anthropic are practically begging for industry-wide regulation. This all seems too… convenient. What’s really behind this new AI regulation push, and how close are we to a society-shaking event? Dave is back to give his full take on the AI race. A lot has happened recently—warnings of dangers to humanity, rogue agents setting up untraceable communications, and AI CEOs conveniently wanting to join forces. First, we’ll touch on the Hugging Face incident that triggered an unprompted cyberattack that human oversight was kept out of; then the economic risks to all Americans (what happens if this ⁠AI bubble⁠ bursts); and finally why these CEOs are suddenly pushing regulation so hard. Let’s get into the financials, though: these companies are losing billions of dollars every year and have extremely optimistic projections to hit. The question is, what happens if they’re off the mark? ⁠Past bubbles⁠ resulted in an almost 80% stock market crash…but this time, the AI industry is even bigger.

8% mortgage rates are now on the table, and unfortunately, that’s not even the high end of estimates for where we’re going next. With ⁠bond yields⁠ hitting 20-year peaks and no end in sight for rising inflation, we may be stuck here for a while. If you’re starting to sweat, don’t worry—we are, too. Thankfully, it’s not all bad news for the housing market, because those who pivot will profit. After a little too much anxiety, Dave called James and Kathy to get their read on mortgage rates—what does an investor do when ⁠refinancing⁠ is off the table, selling means cutting prices and concessions, and even renovating is still so expensive? The housing market is splitting, with some sides doing great, and the others struggling to survive. James gives his full take on how flips, ⁠renovations⁠, and ⁠BRRRR⁠s are doing right now, plus why he’s still excited for what is about to come in winter. Kathy is loving the ⁠builder concessions⁠ that are only getting more plentiful as rates rise, with a surprising rental helping float her portfolio. Dave is still a bit nervous and asks: should he sell the house he’s living in? Buyers, this winter is about to be a big one. Sellers, it’s time to prepare. Investors, look at your property plans immediately after this episode.

The ⁠housing market correction⁠ is about to get worse. Before, the Northeast and Midwest markets were insulated from the sizable price drops happening in places like Texas and Florida, but not anymore. The correction is spreading, and the once “safe” markets are creeping closer and closer to price cuts, concessions, and desperate sellers becoming the norm. The question is: does this snowball into a full-blown ⁠housing crash⁠, or is the housing market strong enough to keep us in “correction” territory? Dave is back, and this time, he’s going deep on what’s next for the housing market. Things are changing, and not in the way sellers would want. Demand is starting to fall as buyers get boxed out of the market and high ⁠mortgage rates⁠ make homes more unaffordable. Sellers once stuck to their prices or took properties off the market to wait, but now they're offering sizable concessions and ⁠price cuts⁠. The supply-demand equilibrium has shifted, and deals are about to get even sweeter. So, if you’re buying today when prices very well could continue to slide, how much of a discount should you go for, and at what point do prices start to bottom?