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Unknown A
So a Trump sized tornado is heading towards the housing market. And we've got good news and bad news related to this. So first I'll tell you the bad news is talking about trillions of dollars. We're talking about a lot of money. Now the good news, it's going to hit Trump states the hardest. Particular some red states. I know it's not the greatest news if you live there, but hey, you got to smile about something. These are the headlines though. This is actually quite serious. US housing market could lose nearly 1.5 trillion in value due to rising costs of climate change. This is coming from CNBC and really caught my attention. Anytime you throw out trillion dollars housing market, we got to talk about it. And the one prediction here is saying 84% of all homes may see some drop in value and that's by 2055.
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Unknown A
We're talking 1.4 trillion in losses. That's prediction by First Street. Here's the quote. Climate change is no longer a theoretical concern. It is a measurable force reshaping real estate markets and regional economies across the United States. I'll say this, we definitely saw the forest fires in the Palisade, which is, you know, in la. I used to actually live in LA and there were fires every year. It's just part of, part of living there. And you'd really need to, you know, pay attention to our climate. You know, when you're, when you're getting a home, you can lose a lot, be it floods, you know, in Florida, all the way up to North Carolina, et cetera, you know, and on top of that like 84% of homes could lose value. It seems this one is a bit more of aggressive prediction. But you know, I think it is very real.
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Unknown A
And you know, I can tell you guys, I live here in Pusan and some of these homes that are like the highest value ones are right on the water and you know, if sea levels rise, et cetera, I mean, it's probably not a great place to live. I mean, yes, it's great like today, but you know, who knows in three or four years. And that's always an interesting thing. And that's why, you know, this is your money, pay attention to this stuff. Also says here, according to report, insurance is expected to grow by a national average of 25% over the next 30 years. That kind of prediction, you know, predicting for over the next three years, that was a tougher one to predict. But you know, I already know that the costs of the LA thing will be spread out among the nation and then on top of that you have, you know, depending again where you live, your insurance will probably go up due to climate change.
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Unknown A
Now there is some predictions on, like, how much it'll go down. It says here the property value impact on average is only about 3% negative nationally. But there are some areas that are expected to lose significant amount of value and that's gonna be Texas. Florida and Louisiana could see values cut in half. So in my opinion. Right. And I can speak to Florida and Louisiana. Texas is an interesting one. I'm not sure exactly and I wanna hear from people in Texas on that one, but I would say Florida and Louisiana. I've seen, you know, like flooding in those times and you know, various times was it Katrina was Louisiana and then we just saw in Florida. It's like, I don't know, once every couple of years you get this crazy hurricane. For me, I think those places are unlivable. So, you know, if I were living down those areas, I'd probably get out now.
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Unknown A
One thing that's kind of interesting, the Florida one there was an interesting port, I think it was from Desantis, who's the governor down there. He was like floating some sort of idea of zero property tax, which they're probably. Frank, that sounds crazy. I mean, I guess it's a way to try to get, you know, people to come down there, hey, come down here, no property tax. And on top of that, nothing else. It's just you have your house and then, you know, the water will come in and you know, no fire, no police, no schools, but hey, no property tax. I mean, I'm sure they'll find other ways to try to fund things down there. But it just seemed kind of ridiculous because I understand it, guys. I understand if you have a, if you have a home in Florida already, your insurance is going through the roof or you may not even get insurance at all because no one wants to insure you.
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Unknown A
And so then, you know, getting some relief from, from property tax probably sounds great, but you know, there is some money you do need to, to, to the city to get, to keep things going. But yeah, that's. Those are three states are going to hit the hardest. Texas, Florida and Louisiana. According to this also says this here, there's another prediction from Delta Terra. They say in the next five years at least 20% of homes will be devalued in some way. So, so another prediction in the past, insurance have not increased prices because of these increasing weather events. That's all falling apart now because of the fragility of the system and some of the insurance market failures that we've seen the last few years. So and also to this, for these kind of companies, they find an excuse to raise your premiums. I'm sure, you know, that's how this game is played.
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Unknown A
Another one, we think that those 20% of markets could be down 30% of the next five years, which is very similar to 2007 and 2012. Right. So again, if you're in these, you know, counties that are affected by climate change, that's, that's a real significant drop. Also the most immediate danger of the major economic collapse is going to come through insurance industry. We're seeing already the fires in LA are making it worse out in California, but that's occurring nationwide where you can't get mortgages and you can't sell properties at value on top of that. This is from the University of Pennsylvania, which is where I went to school. Growing climate related disaster risk has accelerated more rapidly. Ultimately, assets are going to have to find a new equilibrium in order to clear the market. And they mentioned specifically like Hurricane Sandy, you had foreclosures that went up by 46%.
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Unknown A
And I guess they even mentioned in Ames, Iowa and floods in 2008, which I don't remember this one actually. So for those of you in Iowa, I just don't remember. But it said foreclosures went up 144%. Meaning that. So you have a couple things. So one would be property values may go down due to climate risk. Right. Insurance premiums go up and then you have people who, you know, lose their jobs, lose everything and they can't make the payments and it's really tough, you know, and I shared with you guys, I think it was three weeks ago. I have a friend who lived in LA and they had to evacuate. I don't know if I have any friends specifically that lost their homes in this last one and because I have a lot of friends that live in la, but. And I have to check my other friend, what happened to him.
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Unknown A
But I know this stuff is really, really serious. Take it seriously. That's why I mentioned like the flooding or whatever. And you know, we make jokes about this kind of stuff, but not losing your home is no good. And you know, the other thing is too is the insurance industry with Trump and Musk, if they're going to cut a bunch of regulators, et cetera, there could be a situation where it's easier for insurance companies to cheat. You don't think it can't happen, right? I mean, you can just look at what's going on in the health industry. And that's sort of why you would want government to, you know, regulate this kind of stuff. So if you feel like you have a legitimate claim, you have someone to go to. From, you know, the Trump and Bus point of view, there's like, hey, we're here to protect, you know, big money and big business, et cetera.
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Unknown A
But from a consumer point of view, I'm sure you guys see what I'm saying. On top of that, home builders, the stocks are struggling. This, I think this past month they're down like 6% or something like that. They're concerned about Trump tariffs, which he's been threatening at 25% and also to the lack of cheap labor to perfect. Frank says Trump wants to kick out all the illegal immigrants, which I can understand his point of view on that. I'm just saying that's going to have a ripple effect on the housing market. JP Morgan was actually talking about this stuff. There's a lot of things in place. So the first is this is JP Morgan also it cooperates with the Fed. Don't expect mortgages to go down that much until maybe 2026. And you know, that's a long ways out from then. Basically they're saying, hey, you know, to get the housing market going again, you got to get mortgage below 6%.
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Unknown A
If you can't, I mean, even the Fed just came out with a statement. I don't think they're, they're budging. I'll read the Fed statement real quick. They say here a majority of participants observed that the current high degree of uncertainty that's coming from the Fed made it appropriate for the community to take a careful approach in considering additional adjustments to the stance monetary policy, blah, blah, blah. I mean it's just like ends up being they're not, they're not budget. And then Trump does have a couple proposals here to address these issues. One is zoning and federal land. So I'll read them. It says this is coming from JP Morgan and also kind of a prediction of what Trump is saying. Streamlining zoning approval process to shorten construction timelines through this would need to be addressed at the local level except. Except on the federal land.
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Unknown A
And then two, making federal land available for new housing construction projects. I have a, I have a problem with both of these things. I think the way that the Trump people probably try to do it and it honestly it sounds a lot like stuff they do in China and would be one would be okay. And Musk hates regulations Too Trump and must both hate it. It's like, okay, let's figure out a way that we can speed up, you know, new home construction as fast as possible. You're going to have safety concerns. Right? Which is a real thing. The other issue is you may have, like, the way that they approve loans or the way that they get any sort of financing through. You may have all sorts of a fraud and abuse from the builder side. Right. I could totally see Musk and Trump say, hey, we need to get, you know, jobs going again and real estate going again.
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Unknown A
So let's just approve, you know, all these cuts to regulations. Right, Cuts to regulations so that we can finance all this stuff very, very quickly. And then you might have a lot of, like, predatory practices by companies. We saw this stuff in China and actually I live here in Korea. And they'll have these kind of things as well, where there's a lot of, like, scam real estate things going around, and basically they promise you really, really big returns. And the real estate market, just, for example, here in Korea, it's kind of like the stock market. There's a bunch of YouTube channels out there if you want to watch that kind of stuff. They talk about, you know, hot neighborhoods to buy, etc. It's a. It's a whole other. Whole other thing, and it's another risk unto itself. So there's that. So I think the deregulation that Musk and Trump want to do will really affect the housing market for good and for bad.
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Unknown A
So on the positive, yeah, you might get a bunch of more housings on the market, but a bunch of implications on that. And then the federal land, when I'm not a big fan of myself building, you know, new housing and Trump situation, new golf courses and housing, say in Yosemite park or, you know, whatever national was, the other big one, the Yellowstone, that kind of stuff for me, you know, I say hands off those stuff, but that's just me. Other people might have a different opinion on that. You know, maybe Musk and Trump want to drill and all the federal land they possibly can. You know, I'm not into that. I get the arguments for it. I think there's certain places you want to protect and also you want to fund. So this, this goes into sort of their plan. So, for example, there's the headline from Washington Post, long lines and canceled rentals.
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Unknown A
Firing brings chaos to the national Parks is like, okay, so if you're gonna fire all of these park rangers is the idea that you just don't want these to be parks at all for, you know, for us. You just want to just, you know, drill and build your hotels and golf courses. That's probably their plan. It was interesting. Like the, like the wait times and stuff like that are doubled. They've even canceled some people's reservations this year. I don't know if you guys experienced this. And we actually have a lot of park rangers in our community. I think I know more than. More than a couple, because I. Cause I see it in the comments say, hey, I'm a park ranger. And they fired a lot of them. And there was one description of the park ranger thing was really interesting. It was in Yosemite.
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Unknown A
And the basic idea was that there's all of these things to keep track of, right? And it's like a huge mass to, you know, land they'd have to patrol. And sometimes, like, people get locked in bathrooms and stuff like that, which it could totally happen. I'm laughing. It's like, I, you know, I'm not a park ranger, but I could totally see that or, you know, things. Things get lost or whatever, and you got to find park rangers to help find it, et cetera. And basically you just have one person who has to patrol all this land and it's just too big of a region, right? And so you really do want park rangers to be there. And. And in my opinion on this stuff, when you ever see park ranger, any federal employee, whatever, just be nice to them. You know, you'll find, like, be nice to another human being.
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Unknown A
It goes a lot further than, you know, yelling at someone, being mean to someone, that kind of stuff. And, you know, that's kind of what. Just talking out loud. How I see the Trumps and must. The way they treat people is like, you know, they act like they're the boss and they're the only ones that matter. And you have to, you know, sacrifice your life for them and sacrifice your weekends for them, etc. And that's how they think for the glory of the Musks and the Trumps. But that's what's going on. And, you know, it's interesting too, talking about this stuff again, it's complicated issues is, you know, they're going to be laying off 40% of was this federal mortgage insurance, so that'll affect FHA loans. And then you got something like this, how zoning ruined the housing market in blue state America. And effectively, this is an interesting issue and I think Trump, Musk and myself may have, you know, differing views on this stuff.
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Unknown A
So from Musk's point of view, he wants to make sure that everybody drives at work forever, right? Because he has a car company. And so he is totally against public transportation. He wants to figure out ways to profit off of you, et cetera. Right. So the reason why I mentioned that is when it comes to zoning, if a lot of us are working at home in the future, we have to really rethink how our cities are designed, right. And figure out ways for people essentially to move back into these empty commercial buildings and rezone those. So that would be one thing I think Trump would probably before the rezoning of that kind of stuff. I think Musk's point of view, he's like, he wants us to live all fall apart and be able to essentially, or be forced to, I should say, drive Teslas everywhere to do everything, be it work, shopping, etc.
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Unknown A
Or takes his, you know, stupid Tesla taxis. I'm all about public transportation and, you know, eco living. I guess Trump's probably against eco living though, so we probably are, you know, would dispute on that. But the zoning stuff is an interesting one in terms of like, for example, when I lived in la, places like Beverly Hills would always vote down any kind of public transportation to make it easier for people to get there. And it was pretty ridiculous because, you know, if you ever been to Beverly Hills, you know, this, you know, there's lots of restaurants, there's stores, there's all sorts of stuff up there, right? And the workers, you know, need to live somewhere too. And the workers need a place to hang their hat, they need a place to eat. Like it needs to be more sustainable. And you'll visit, if you guys visit cities in other parts of the world, it is not so segregated by income.
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Unknown A
Meaning that in a sustainable society, you know, you have parks for everyone to play in, right? Public parks, public transportation. Yes, you'll have nice places where people live, but you also have low income places because again, a society needs different types of jobs. Not everyone is going to be the Musk and the Trump, right? There's some people who are going to be your cooks, some people are going to be your, you know, your barbers. Some people are going to be your, you know, home, like housekeepers, these kind of things and just different types of things. And you know, the way that some of our cities are constructed, and I want to say the first one that comes to mind would be like Atlanta. But you guys can probably think about those cities where you'd have situations where, you know, you would have the infrastructure of a city would completely Divide, you know, various neighborhoods and the ones that would be, you know, disadvantaged and they have to get to work, they would find themselves crossing, like literally walking across highways kind of thing, which is dangerous because there's no other way to get to work.
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Unknown A
And not saying, I'm not advocating for walking across highways or anything like that. I'm just saying the way our cities are designed, they're not really connected, and that's on purpose. And I'm saying in other parts of the world, it's not really like that. The income levels are more integrated and more sustainable. So there's a lot of stuff to talk about, this stuff, you know, be it your climate change, be it, you know, how we zone cities, how are we going to construct more affordable places where people live and where interest rates going to be? There's a lot of factors in play. The problem is, again, the Trumps and the must, they don't really take into consideration just regular people. They mostly just think, okay, how's this going to benefit billionaires, you know, and billionaire pocketbooks? And that's all they really think about. They don't actually think about actual Americans who are living on the ground.
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Unknown A
And that's what I like to talk with you guys about. So I want to hear your thoughts on any one of these topics. Regarding. Do you agree or disagree with this? Climate change could really affect real estate values and does that affect your decisions when you're buying a home? I do appreciate your time and catch you on the next video.