JPMorgan Makes a $750B Bet on the Housing Market

0:04Today, we're comparing notes on headlines catching our attention and what it could mean for investors. I'm James Daynard, filling in for Dave today, joined by my good friends Kathy Fecky and Henry Washington. So let's just jump right in. Henry, what do you got today? Well, I picked a story that was very near and dear to my heart, top of mind, something I am always thinking about. The headline is, the market may have already peaked for 2026 and the summer isn't even over yet. This is an article I found on usnews.com, and it's talking about what's happening in the real estate market in terms of sales.

0:43So the article goes on to talk about that existing home sales fell 1.7 % in July to a seasonally adjusted annual rate of 4.06 million. Even as the median home prices have climbed to a record for the month, the national median existing home price rose 2 % year over year. That's up to$434 ,000 in July, making that the 37th consecutive month of annual price gains. So housing prices have gone up and the market seems to have already peaked in terms of sales price. And now that we haven't finished summer yet, but we're moving into what would normally be a winter slowdown anyway, could be just a not pretty time in terms of real estate sales in the country.

1:35And as I was researching this article, I came across another article that talked about how first home purchase sales are down, but luxury home sales are up. And I think all of this is tied to affordability. Interest rates peaked over the last month and that's caused a slowdown in the market for people who are just barely priced into the market. But there's also a lot of people who have made a lot of money or are making a lot of money in stock market gains. And so the wealth gap is pretty substantial. And so the people who have more money are buying more luxury homes. And in my market, I'm seeing exactly that.

2:19And why do I know that? Because I'm trying to sell my house right now, my personal house. And every house in my neighborhood in the luxury market, when it goes up for sale, it is under contract in less than 30 days. Wow. But when I'm selling my flips, I am seeing longer times on market. It's a little harder to sell them. There's more competition. And so I think all this just plays into affordability. But I was very curious, James, like, is that the same thing you're seeing in your market? Your market's substantially more expensive than mine, but you're doing deals consistently. Yeah, it's flat.

2:55Things are sitting on market. I mean, it depends on what it is. There's velocity in every city. so you know i think one of the most important things that we've been going over the last 90 days is where's the velocity at in every zip code because it doesn't matter if it's luxurious or it's a first-time home buyer there's a price point that's moving in that in that pocket it's not everything is not selling but there's a lot of things that aren't moving and so we're really locking down by zip codes price points where's the velocity and that's what we're really targeting You know, like, for example, in North Seattle, if you have a house that's 1.5 million and it's a good street, that is selling and it's going to sell on the first weekend.

3:37If you're 1.7 million not selling, your market times are going to 100 days. And so you really got to look at every type of price point. Like, you know, kind of look in 10 % blocks and then focus on that because it tells you where to be aggressive and not to be aggressive. I mean, it's not enjoyable in the summer when you're sitting on, I think I got like 18 for sale. I would say I'm picking off two to three a month. But one thing I do want to stress is this was no different last summer. Last summer was terrible. And so what I'm hoping is we actually did see a little bit of an uptick in momentum the last two weeks.

4:12I think we sold five new construction of ours, like a little bit more starter units. I sold a couple of different flips. And it's funny, the ones I thought wouldn't sell, sold. And the ones I thought would sell, would sell. Story of my life. Same thing here. Just when I think I'm a real estate expert and can predict what's going to sell and what's not, I am absolutely not that. Because I have houses that I'm like, this one's going to be a tough sale under contract in 30 days. And I have houses that I'm like, oh, this one's going to fly off the shelves. Sits. So don't ask me. Maybe I just don't know what buyers want anymore.

4:46It's crazy. I mean, we have a subdivision we're building in Oregon. and we actually have the city come to us and say, we need more housing. We want to help you come up here. We've heard your reputation. And we did. We got some land. We got a great deal on it. This is the one where we just optioned the lots. We didn't even have to buy them, built the homes, and they're sitting. Same thing. And the offers we're getting are brutal. It's something you and I would offer. They are lowball offers. We had one regular sale recently, but same thing, like five brand new homes just sitting on the market and it hurts.

5:24It's painful. But then we have a big subdivision, the one I've probably talked about before. It's north of Tampa. And that's where we bought 4 ,200 lots back in 2012, I don't know, for 10 cents on the dollar. But it's a lot of lots. And that one has just been consistent. It's done great. And maybe because it's, I don't know, it's Florida, it's inland. Could be that people are moving from more expensive areas like Miami has gotten so expensive, they're moving inland where there's not as many. I don't know. But that one's doing great. So as we always say, every market is different. But I also have my finger on the pulse of buyers.

6:02And we just saw massive buying at Real Wealth, one of the best months that we've had. So what's that? You know, just all over the place. Yeah. And it's so weird. James, you mentioned that like we had a similar time last summer. And I agree with you from the from like a velocity perspective. But this summer feels a little different. And here's what I'm saying in my market, because, again, real estate is is is local. Last year, when I put a good product on the market, it was done well and priced right. It's still sold this summer. that's not always the case. Sometimes that's the case, but sometimes it's not.

6:45And I think affordability is really playing more of a factor this summer than it has last summer. Because the trend that I'm seeing in my market is when we start comping these houses before we put them on the market again, and actually when we're buying them, because I comp them twice. I comp them when I buy them, and then I comp them right before we put them on the market so that I can make sure that we price it right because the market shifts pretty quickly sometimes. And what I'm seeing in comps is homes that are unrenovated but livable and clean have far less days on market than homes that are flipped and look super pristine.

7:29And I think that's just the affordability. I think people are much more willing to buy a unflipped home where they can put their own touch on it and get in for a lower price point than houses that are looking awesome because they've been flipped. And so we've had to adjust our strategy where we do kind of a two pronged approach when we're buying deals right now. I comp deals where I can just clean them out, turn around and sell them as they sit. And I comp deals as a flip. So I'm using the flip as my plan B now. Plan A is just to get it clean and livable and get it on the market and see if we can get that deal churned faster.

8:10And we've done it a few times now and it's worked out really well. But all of that, to me, is just a problem with people's affordability. We're seeing the same thing. You know, there's grandma's house, right? Which is like your clean dated house, well kept and well taken care of. But, you know, these aren't like fixer properties. These are like, you know, the windows are okay. The roofs are okay. There's about a 20 % delta on that price. Like if that house is selling for a million dollars in our neighborhood, it's going to trade for 850 as is in that kind of dated condition. And it's pretty consistent across the board.

8:45Same thing for 500, they're selling for like 380. and so we have problems making that pencil because we have to buy them so cheap that we just can't get them for that pricing yeah well again i think because real estate's so regional like my market doesn't have those kinds of spreads for me it's the percentage wise it's not that big of a deal so as an example we just bought one for 130 now original like the flip plan is to spend 60 on the renovation, sell it for 275. But instead of doing that, we're going to spend three to 5 ,000 on the renovation, just cleaning it out, cutting back some of the shrubs and the bushes in the backyard, uh, professional cleaners, stick it on the market for a$200 ,000.

9:31So yeah, I could sell it for 275 flipped or I can spend nothing, sell it for 200 and I'll actually make pretty close to the same amount of profit. Yeah. Look for the velocity because people are rain clouds right now they're like oh market's i got some messages from somebody like hey you want to come to this conference i was like no and like well it's just important to get everyone together to huddle and talk about what's going on with the market i'm like are we in the same market like the market's not like it's not like it's 2008 or 9 i mean this is this is flat and i think the key today is you've got to reduce your holding costs on everything whether it's new construction build whether going to dispo how can you get that monthly debt down right whether you're refinancing them into dscr loans can you refinance that product you know right now i'm about ready to refinance all my flips into more dscr because then it just knocks two points off my interest carry yeah and you just got to look at how can i stop the bleed and it's not just for flipping any type of project right now the bleed and the expense of the debt is what's really beating up the deals because it's just taking a lot longer to sell yeah i mean that's kind of why i love and probably will continue to do buy and hold so i don't have to worry about selling anything just renting it well kathy like could you guys buy so much new construction for the buy and hold yeah because some price points are dead in the new construction like you're trying to i mean you guys have been able to start talking to these builders about dumping off in bulk too We've been doing it for years.

11:03I mean, builders are distressed. And when you're a buyer, you want to look for the distressed. I mean, you guys know that. So why not? I know this sounds terrible, but why not look for a distressed builder? Because now you don't have to buy an old property and fix it up. You've got a brand new property that you can get for a discount. So that is what we've been doing. I literally just was looking at some properties that are highly discounted from builders and they don't want to reduce their price because then they ruined the comps for everything else they've got to sell. So if they can spend a bunch of money and buy down your rate, you can get a really low rate, in some cases 3%, that really makes it cash flow well in a brand new home.

11:45And a lot of people don't realize on the buy and hold side, if you have a new home, say in Florida where everybody's complaining about insurance, the insurance is not high on newer homes because they're built to hurricane standards. So it's just a lot lower insurance, a lot lower capex over time. And people love to rent new homes. So it's fairly easy to rent. So for me, it's kind of a set and forget type buy and hold. And I love it. So yeah, to me, it's a wonderful, one of the greatest opportunities out there. But this is only for people who don't like it their hands dirty like me. No, but you know what though?

12:21It's the new construction. It's starting to become very attractive for value add investors because you're, you can now buy for less than the, you can build it for. Yeah. In a lot of cases. And, and listen, I'm on both sides of that. Like I I'm on the side of being a builder and trying to sell stuff and having a really difficult time, but that's kind of how it is for you guys, right? If you're in flipping, you got to be able to find the deal. So you love a buyer's market, but then you got to sell it. So you hate a buyer's market. That's the game. When are you going to time it perfectly where you're buying in a buyer's market that you're selling in a seller's market?

12:51You just have to figure it out, right? It's a balancing act, which is why if you are buy and hold, all you really have to focus on is the buy and then the hold being what are the rents, how are rents doing? Are they going up or down versus I got to think about what I'm selling? Because if you're buy and hold, if you want to sell, you just sell when the timing's right, right? Well, Kathy, I want to talk about some serious money getting put into the market. But before we do that, we're going to take a quick break. Quick word about a new pro perk you'll want to know about. Avon. If you're a homeowner, there's a good chance you're sitting on equity that you're not using.

13:27The problem is tapping into that usually means a cash out refi, a traditional second mortgage, or weeks of paperwork just to get approved. Avon built something different. It's a credit card, but it's backed by your home equity. So you get a lot of the rate benefits of a HELOC with the flexibility of a card you can use anywhere. Rates are typically well below a standard credit card. Approval is fast and mostly online, and you can use it for anything. A renovation, paying down high interest debt, or just have more breathing room in your budget. And if you're a BiggerPockets Pro member, there's an extra reason to check it out.

13:59Get approved for the AVEN card, and you'll get a$400 statement credit after spending$400 on your AVEN card. Enough to cover your entire annual Pro membership. Head over to AVEN.com slash BiggerPockets to see if you qualify. Avon Financial, Inc., NMLS number 2042345. Cards issued pursuant to a license from Visa USA, Inc. by Coastal Community Bank. NMLS number 462289. Member FDIC, equal housing lender. Subject to approval. Terms apply. Visit avon.com for details. If I had to hire someone to join the BiggerPockets team, I wouldn't just be looking for someone who checks a few boxes on a resume. I'd want someone who understands real estate, can move fast, communicates well, and can jump into a fast-paced environment without missing a beat.

14:37When you need that kind of person, this is a job for sponsored jobs. Sponsored jobs posted directly on Indeed are 95 % more likely to report a hire than non-sponsored jobs. That makes sense to me. In fact, people are finding quality hires on Indeed right now. In the minute I've been talking to you, companies like yours made 27 hires on Indeed according to Indeed data worldwide. Join the 3.3 million employers worldwide that use Indeed to connect with quality talent that fits their needs. Spend less time searching and more time actually interviewing candidates who check all your boxes. Less stress, less time, more results.

15:16When you need the right person to cut through the chaos, this is a job for Indeed-sponsored jobs. And listeners of this show will get a$75 sponsored job credit to help get your job the premium status it deserves at indeed.com slash podcast. Go to indeed.com slash podcast right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash podcast. Terms and conditions apply. Need to write higher fast? And this is a job for Indeed-sponsored jobs. Summer bookings sound great until someone slips by the pool, gets hurt on your dock, or damages your property during a long holiday weekend.

15:54A lot of short-term rental investors don't realize their standard policy may leave gaps when it comes to short-term rental activity. That's why investors use Steadily. They offer landlord insurance built for real estate investors, including short-term rentals. And if you're a BiggerPockets Pro member, you'll also get 5 % off your landlord insurance premiums. Visit biggerpockets.com slash landlord insurance to learn more.

16:21Welcome back to the On The Market Podcast. Kathy, someone's about ready to drop some serious money into the housing market. I wanna know where the money's getting spent because I can go follow it. Yeah, my article today really contradicts the sort of doom and gloom we just talked about. This is an optimistic article, I guess you could say. It's from JPMorgan Chase. And it's basically JPMorgan Chase is doubling down on housing. So they see something that maybe others don't see. Those who are sitting on the sidelines should probably sit up and pay attention. They are deploying$750 billion through 2035.

16:59That's up by more than$200 billion through their American Dream initiative. This is nearly 40 % more than the firm's housing capital deployment over the past decade. So again, we're seeing big companies like Berkshire Hathaway investing in builders. You've got JPMorgan Chase upping what they're going to be lending and also kind of coming in as debt and equity to build affordable housing. And you've got Japanese companies buying American builders. So these huge firms are a little more positive than we just were. They see this demand coming. They see this lack of housing and they are all in. I mean, this is huge.

17:42My guess is that a lot of times companies will follow legislation and clearly we just had this new legislation really pushing for new housing. And maybe they're getting incentives for doing it. Maybe they know something we don't know about the new housing bill, getting tax credits, but there's more momentum towards bringing on that affordable housing and the big players are jumping in and taking advantage. You always want to follow the money, right? I mean, it's kind of like, I remember 2008, 9, and 10 when Blackstone started buying all the single fans. Or no, it was 2010 and 11. I can actually tell you the date.

18:16It was 2012. It's when Warren Buffett said on national TV, if I could buy a few hundred thousand houses, I would if I knew how to manage them. That was the second part, if I knew how to manage them. Instead, he went into creating Berkshire Hathaway and be on the real estate sales side. But a bunch of institutional investors at that time said, well, golly, I'll learn how to manage them. And let's face it, they didn't know how in the beginning, but they figured it out and they brought in new systems. So I do feel like that's kind of happening right now. There's a lot of signals that we should be paying attention to because there's big money coming in.

18:51And those people sitting on the sidelines waiting for prices to drop, do you think Warren Buffett's company might know a thing or two? Do you think JPMorgan Chase might know a thing or two? Like, listen to them. Sure, it's probably easier for them to make bets. But to me, it does feel like a similar signal that we got in 2012 that we're getting now. Part of this is for financing too. Yeah, they're going to be lending. Being a lender is one of the more safe positions. But, you know, trying to be able to help more people get into housing, be able to buy their own home, but also building, bringing on new affordable housing as debt and equity.

19:29I was looking at this article and it got me thinking like, so, you know, what does it really mean when JP Morgan says they're deploying more money into the single family real estate space. And when I was reading through it, it looks like it breaks it down in buckets. So it's saying one of the buckets is they're going to be lending more money to developers to build apartments. So that increases housing units, increases apartment units. There's another bucket where they're going to be writing more mortgages. So this is what I thought the article was mainly talking about. So in other words, they're saying we're going to be writing more mortgages.

20:04More people should be able to buy a home, get a loan from us. We want to put money out there for people to buy homes. And then the third bucket is investments in affordable housing funds, which is interesting. I hadn't thought this was something they do, but essentially putting their own money at risk as an investor and investing in affordable housing funds, which is pretty cool. But that's a lot of capital to be all thrown at one specific asset class. So that's, I mean, I like it. That's good for me. I'm a single family and small multifamily investor. So to me, that means that the asset that I own has some demand attached to it.

20:41Yeah. It's funny. There's so much weird, bad taste in people's mouths about these big companies buying in real estate. You know, they don't want hedge funds buying up all the housing, right? And when you really dig into this article, it's, they're providing a lot of money for first-time homebuyers, different types of financing options. and the good thing is, I always look at this as the banks are very quick to change their mind, the big banks, right? That's why, like as an investor, I only work with small banks because once the big bank gets sick of real estate, they don't really want to give you too much money on it.

21:14The good news is, is when you are seeing bigger banks, they have a lot of money, they spend a lot of money on research deploying that much capital into the housing market, they're not really predicting a massive crash because why are they going to provide so much financing for first-time homebuyers that are putting down a low down payment if they think their assets can be worth 10 to 20 % less in three years. They're predicting stability is how I look at that. So anytime they're providing this kind of financing, it makes me feel more confident, especially when you have a flatter market right now.

21:41And that's what you want is you want confidence in this market because when the market is flat, you start to double guess yourself on everything. You're like, is this a deal? Like I know what a deal is. I've been buying deals a long time, but on paper, it's a deal, but is it really a deal, right? Like, and so these are important things to look at because it shows stability coming forward. And so I like these things just gives me a little bit of that like spinach courage to where I'm like, all right, let's go buy some stuff. Well, we're going to dive into the CPI report and what's going on with inflation and what that could mean for rate cuts soon as we take this break.

22:17There's a point where basically every investor realizes traditional financing stops scaling with you. At first, it works. You qualify with your income, your job, your tax returns. But as you grow, that model starts to break. Now, it's not really about your personal income. It's about the income from your properties. That's where DSCR lending comes in. And it's why a lot of investors end up working with lenders like Host Financial. Host Financial qualifies deals based on property income, not personal income. So you're not dealing with W-2s or tax returns or DTI constraints. And with 80 to 85 % LTV, you can stay more flexible as you scale.

22:58It's just a different framework, one that tends to align better with how investing actually works. If you're buying rentals, refinancing, or growing your portfolio, go to hostfinancial.com. That's H-O-S-T financial.com and see what you qualify for. A lot of insurance companies compete on one thing, speed. But if you're protecting an investment property worth hundreds of thousands of dollars, should speed really be the priority? NREG believes strong coverage starts with understanding the property, the risks, and the realities of ownership. That's why they don't rush the process. Their policies are designed for real-world claims, not just quick quotes.

23:38If you want insurance built to protect your investment when it matters most, visit nreig.com slash bplc and learn more today. You know that thing where you discover a feature you wish your software had? And it turns out it already exists just on a different platform. Like, oh, you want rent payments processed in two days. RentReady does it. Oh, you want to block tenants from making partial payments mid-eviction. RentReady does that too. Oh, you want full accounting and tax-ready reports with without paying for a second tier, RentReady does it. And oh, you want tenant screening that doesn't overcharge your applicants?

24:17RentReady also does this. Basically, if you've ever complained out loud about your property management software, RentReady probably already built the fix. It's$12 a month. You're welcome. Sign up right now for$50 off your first year of RentReady with promo code BPCASH. BiggerPockets Pro members get it completely free. Sign in through your pro account at rentready.com slash biggerpockets. That's rent, R-E-D-I dot com slash biggerpockets. Quick note before we dive back in. This episode is brought to you by Cash App. I've been using Cash App for years to send and receive money and to online shop safely.

24:55More investors are thinking about where Bitcoin fits into a broader portfolio, not as a short-term trade, but as long-term exposure to an asset that behaves differently from traditional markets. Cash App makes that kind of Bitcoin strategy more straightforward. You can buy Bitcoin directly in the app, set up recurring purchases, or make larger buys when it makes sense for you. And with zero fees and zero spread on automatic purchases like auto-invest, roundups, and paid in Bitcoin, more of your money goes towards Bitcoin. Download Cash App today, visit our link in bio, Bitcoin Services by Block Inc.

25:29See the Bitcoin disclosures at cash.app slash legal slash podcast.