# The Housing Market Is About to “Stall” for Years Source: https://www.youtube.com/watch?v=Nsrtgxr7d6s Recap page: https://rapidrecap.app/video/Nsrtgxr7d6s Generated: 2025-11-10T19:33:21.143+00:00 --- ## Quick Overview The housing market is predicted to enter a prolonged "stall" phase, lasting years, rather than experiencing a full crash, due to persistent affordability issues stemming from high wages relative to home prices and elevated mortgage rates, leading to a scenario where investors should focus on finding deals with built-in cash flow and hedging against downside risk, rather than expecting rapid price appreciation. **Key Points:** - The most likely scenario for the housing market is a prolonged "stall" lasting years, not a severe crash, despite current affordability issues. - Affordability is the number one variable driving the market, determined by wages, prices, and mortgage rates, which are currently unfavorable for buyers. - The speaker assigns a 15% chance to a crash scenario, but a 50% chance to the "Great Stall" scenario where prices stagnate or rise slowly (3-4% annually) while wages remain high. - In a stall scenario, investors can still find good deals, especially owner-occupied properties where rents are likely to grow, providing positive cash flow and equity protection. - Black Swan events (like 9/11 or COVID-19) are considered low-probability (2-3%) but highly impactful, though the current economic conditions do not strongly suggest an immediate crash. - The fundamental strategy remains acquiring assets that generate cash flow, positioning investors to benefit from eventual recovery. - Investors should be conservative, protect against downside risk, and seek multiple upsides in any deal, even in the current environment. ![Screenshot at 00:12: The Housing Market is about to stall for years, referencing charts showing price reductions, nominal house prices, and real house prices over time, setting the stage for the analysis of future market paths.](https://ss.rapidrecap.app/screens/Nsrtgxr7d6s/00-00-12.png) **Context:** Dave Meyer, Head of Real Estate Investing at BiggerPockets and author of "Start with Strategy" and "Real Estate by the Numbers," analyzes recent housing market data to forecast potential future paths for home prices, mortgage rates, inflation, and employment. He emphasizes that current market dynamics, particularly poor affordability, suggest a period of stagnation ("The Great Stall") rather than a sharp decline, advising investors on how to position their portfolios accordingly. ## Detailed Analysis Dave Meyer projects that the housing market is heading into a multi-year "stall" phase, primarily driven by historically poor affordability, which is a combination of high wages relative to home prices and high mortgage rates. He assigns a 50% probability to this "Great Stall" scenario, where housing prices stagnate or grow slowly (3-4% annually), contrasting it with a full crash scenario (15% probability) or a melt-up (higher prices). The speaker argues that while housing prices did not crash significantly during the 2008/2009 crisis as much as some predicted, the current conditions—where high wages support prices while mortgage rates remain elevated—mean that affordability improvements will be slow. He advises investors to adopt a risk-off approach, focusing on acquiring properties that generate immediate cash flow and offer multiple upsides, like rent growth, even if price appreciation is minimal in the short term. He explicitly states that investors should not bet on an immediate crash but instead prepare for a prolonged period of slow growth or stagnation. ### Scenarios Overview - Housing Crash (15% probability) - Melt-Up (Higher Prices) - The Great Stall (Most Likely Scenario, 50% probability) - Black Swan Event (2-3% probability) ### The Great Stall (Most Likely Scenario) - Housing prices stagnate or grow slowly (3-4% annually) because affordability remains poor due to high wages relative to prices and high mortgage rates; this is not an extreme crash but a prolonged period of little movement. ### Key Variables - Affordability is the number one variable, driven by wages (which are high), prices (which are high), and mortgage rates (which are relatively low compared to the early 1980s but high compared to the last few years). ### Black Swan Event - Unlikely (2-3% chance) events like a major geopolitical shock or a sharp rise in unemployment (e.g., 8-10%) that could force prices down. ### Preparing for the Stall - Investors should focus on cash-flowing deals, avoid over-leveraging, and ensure properties have inherent value (like owner-occupied rentals with rent growth potential) rather than relying solely on appreciation. ### Don't Skip This Market - Even in a stall, there are opportunities; don't wait for a crash to deploy capital, as the recovery period following a stall could be long. ### The Payoff Could Take Longer - Returns will be slower than the aggressive appreciation seen during the COVID era, requiring patience for equity gains. ### Go "Risk-Off" - Adopt a conservative investing mindset, protect downside risk, and seek multiple upsides (cash flow, tax benefits) in all deals. ![Screenshot at 00:12: The speaker displays charts summarizing recent housing market data trends, including price reductions, nominal prices, and real prices.](https://ss.rapidrecap.app/screens/Nsrtgxr7d6s/00-00-12.png) ![Screenshot at 00:50: Intro graphic for the BiggerPockets Real Estate Podcast featuring Dave Meyer.](https://ss.rapidrecap.app/screens/Nsrtgxr7d6s/00-00-50.png) ![Screenshot at 03:09: Dave Meyer introduces the episode's structure, listing the five potential scenarios for the housing market.](https://ss.rapidrecap.app/screens/Nsrtgxr7d6s/00-03-09.png) ![Screenshot at 04:50: Visual representation of the current housing crisis, emphasizing that Americans can't afford current prices.](https://ss.rapidrecap.app/screens/Nsrtgxr7d6s/00-04-50.png) ![Screenshot at 07:54: On-screen text highlights the first point: "1. Housing Crash," as the speaker discusses the possibility of a market downturn.](https://ss.rapidrecap.app/screens/Nsrtgxr7d6s/00-07-54.png) ![Screenshot at 11:02: On-screen text highlights the third scenario: "3. The Great Stall," which the speaker believes is the most likely outcome.](https://ss.rapidrecap.app/screens/Nsrtgxr7d6s/00-11-02.png) ![Screenshot at 17:16: The speaker gestures to emphasize that even in a difficult market, there are always ways to invest and generate positive returns.](https://ss.rapidrecap.app/screens/Nsrtgxr7d6s/00-17-16.png) ![Screenshot at 27:28: The speaker discusses the necessity of mitigating downside risk through careful investment choices, contrasting with aggressive behavior seen in past years.](https://ss.rapidrecap.app/screens/Nsrtgxr7d6s/00-27-28.png)