Dave Ramsey Explains The Housing Market In 2025

Summary

Summary of "Dave Ramsey Explains The Housing Market In 2025"

Episode: Dave Ramsey Explains The Housing Market In 2025
Host/Author: Ramsey Network
Release Date: August 4, 2025
Duration: Approximately 8 minutes

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Introduction to the Housing Market Dynamics

In this episode of The Ramsey Show Highlights, Dave Ramsey delves into the intricacies of the 2025 housing market. Responding to a caller's concerns about real estate investments in Nashville, Tennessee, Ramsey provides an expert analysis of current market trends, addressing misconceptions fueled by social media narratives.

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Caller’s Real Estate Investment Scenario

The episode begins with a caller presenting a personal real estate scenario:

Caller [00:10]: "Let's say the house I bought back in 2020 is quote, unquote, worth double and I put on the market for double what I paid for it in 2020... I feel like on social media and whatever the report is, house prices are falling... Is that a bad way for me to look at the real estate investment?"

The caller seeks Ramsey's opinion on whether perceiving their investment as "house money" is a misjudgment amidst widespread claims of declining house prices.

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Understanding Market Value vs. Sale Under Duress

Ramsey clarifies the distinction between market value and sales occurring under duress:

Dave Ramsey [00:59]: "The definition of market value of a piece of real estate is what a willing buyer is able to give a willing seller when neither are under duress."

He emphasizes that sales forced by circumstances, such as foreclosures, do not reflect the true market value. Ramsey explains that distressed sales can temporarily depress prices in specific neighborhoods but do not indicate a broader market decline.

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The Impact of Duress on Property Sales

Addressing the caller's point about selling below market value due to increased inventory, Ramsey elaborates:

Dave Ramsey [02:09]: "They may have leveraged what you call a motivated seller for one reason or another. And house has been sitting on the market and they lower the price below what the appraisal would be."

He underscores that such sales are exceptions driven by specific pressures and do not represent the general trend in housing prices. Ramsey reassures listeners that the overall market remains robust despite isolated instances of price drops.

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Debunking Social Media Myths on House Prices

Ramsey critiques the portrayal of the housing market on social media platforms:

Dave Ramsey [03:36]: "Social media is a drama queen... that's not going to do with the actual reality of what's happening in the market."

He argues that much of the negative sentiment on social media stems from personal frustrations rather than factual market data. Ramsey highlights that real-time metrics show a steady increase in median house prices, contrary to the sensationalized claims of decline.

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The Appraisal Process and Its Integrity

Detailing the appraisal process, Ramsey explains how accurate market value is determined:

Dave Ramsey [04:14]: "If you're going to do an appraisal on a piece of residential real estate, you find three comparable sales within the last 90 days... you have a residential appraisal."

He stresses the importance of using non-distressed comparable sales to ensure appraisals reflect true market conditions. Ramsey cautions against using foreclosures or distressed sales as benchmarks, as they skew the appraisal results.

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Reflecting on the 2008 Housing Crash

Ramsey draws parallels to the 2008 housing crisis to illustrate how market values can reset after widespread foreclosures:

Dave Ramsey [05:07]: "That's what we're getting into... So no, we... when the bank resells it, you can't count that. That's a real estate owned and RTO. You can't count that as your appraisal."

He explains that after the 2008 crash, neighborhoods heavily impacted by foreclosures saw a significant drop in property values, necessitating a market reset. Ramsey notes that such resets are localized and take time to recover, differing from broader market movements.

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Current Market Conditions and Future Predictions

Analyzing the present state of the housing market, Ramsey provides data-backed insights:

Dave Ramsey [06:50]: "Median house price... has gone up every single month... It's not going down."

He references real-time data indicating a consistent rise in median house prices, driven by favorable inventory and sustained demand. Ramsey anticipates a potential surge in the market around September, likening it to "a dad gum heroin fire thing," suggesting a swift and significant increase in prices once certain economic factors stabilize.

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Concluding Thoughts on Housing Market Stability

In closing, Ramsey reaffirms his stance against the notion of an imminent housing bubble:

Dave Ramsey [08:32]: "It's not a bubble... Demand has outpaced inventory. Demand is higher than supply."

He reiterates basic economic principles, asserting that the current market dynamics support rising house prices. Ramsey dismisses temporary anomalies, such as supply chain disruptions caused by events like COVID-19, as short-term fluctuations rather than indicators of long-term trends.

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Key Takeaways

• Market Value Defined: True market value is determined by willing buyers and sellers without external pressures.
• Distressed Sales: Sales under duress, like foreclosures, do not accurately reflect the broader market trends.
• Social Media Skepticism: Negative narratives on social platforms often stem from individual frustrations rather than factual data.
• Appraisal Integrity: Accurate home appraisals rely on comparable sales free from distress.
• Historical Context: The 2008 housing crash serves as a case study for understanding localized market resets.
• Current Trends: Data indicates a steady rise in median house prices, with expectations of continued growth.
• Economic Principles: Fundamental supply and demand dynamics are currently sustaining the housing market's strength.

By providing a comprehensive analysis, Dave Ramsey equips listeners with the knowledge to navigate the housing market confidently, dispelling myths and emphasizing data-driven insights.

Transcript

[Dave Ramsey]

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[Caller]

Hey, Dave, can I ask you a quick real estate question real quick?

[Dave Ramsey]

You can?

[Caller]

All right, so this might be bad math in my head. So let's say we're in Nashville, Tennessee, where the real estate has gone way up in value over the last five, ten years.

[Co-host]

Right?

[Caller]

Okay, so let's say the house I bought back in 2020 is quote, unquote, worth double and I put on the market for double what I paid for it in 2020. And let's say because of the influx in inventory, I have to drop the price a bit and somebody comes in and bids $10,000 left. So it's just a little under double. I feel like on social media and whatever the report is, house prices are falling. But the way I look at it is I'm still on house money because it's worth almost double what I paid for it. And just because I take. Is that, is that a bad way for me to look at the real estate investment?

[Dave Ramsey]

Okay.

[Caller]

Do you what I'm saying?

[Dave Ramsey]

No, it is house money, but it's, it's different than that. The reason social media is wrong is for a different reason. Market value of a property, by definition, when I went to real estate, when I got my four year degree in real estate, I have a degree in real estate and finance. If you go to appraisal class and you go to take, even take your real estate test, they teach you this. The definition of market value of a piece of real estate is what a willing buyer is able to give a willing seller and willing when neither are under duress. Okay, so in other words, if you're getting foreclosed on, that's not a valid. You can't use that sale when you're doing an appraisal.

[Co-host]

Right.

[Dave Ramsey]

Because it does not establish market value because one of the parties is under duress.

[Co-host]

Okay.

[Dave Ramsey]

If you've had a house on the. If you bought another house and you're having to sell your house out of desperation because you shouldn't have bought the other house and now you got two house payments, one of the parties is under duress.

[Co-host]

Okay.

[Caller]

So they might sell it, quote, unquote, below market value.

[Dave Ramsey]

Yes.

[Caller]

Just to get rid of it.

[Dave Ramsey]

Yes. Because. But it has, but it does not establish market value. So when someone says house prices are going down, they mean market values are going down. Market values have not gone down. But there are some parties because the market has been sluggish that are under duress.

[Co-host]

Gotcha.

[Dave Ramsey]

And are selling.

[Caller]

They may have leveraged what you call.

[Dave Ramsey]

A motivated seller for one reason or another. And house has been sitting on the market and they lower the price below what the appraisal would be, what a willing buyer. But they're no longer without duress. They have duress, meaning there's a stress, they're in a stress situation. And so that doesn't establish market value, that doesn't establish what home prices are doing now. But if you're in a seller's market, then the buyers are under duress because they can't. That's when you get 83 offers on the house. If you're in a buyer's market, which we haven't seen in a long time because inventories have never kept up with demand. But if you're in a buyer's market, that means there's houses everywhere and the buyers could come in and cherry pick what they want and they can demand stuff from sellers because the sellers are under more stress and that drives prices down. But we haven't seen that in two decades.

[Caller]

But even if market value went down 20%, I'm still up, you're still on house mart.

[Dave Ramsey]

But house prices would have gone down if that was the case.

[Caller]

Correct.

[Co-host]

There you go.

[Dave Ramsey]

So social media would be correct. But social media is a drama queen.

[Co-host]

Correct.

[Dave Ramsey]

It's not functioning on anything except, you know, some 20 something year old living in his mother's basement having a little snowflake attack.

[Co-host]

Correct.

[Dave Ramsey]

And that's your social media. That's not going to do with the actual reality of what's happening in the market. That's just somebody pissed off because they feel like they got boxed out of the market because they're a barista after.

[Caller]

Getting a PhD, pissed off because they did some napkin math and looked at the wrong Internet website and said my house is worth $1.2 million. They get an offer for 700 and in their soul they feel like they.

[Dave Ramsey]

Lost $500,000 when if it was not worth 1.2.

[Caller]

That's exactly right.

[Dave Ramsey]

Yeah, it was never worth that. And so is there actual market value. So if you're going to do an appraisal on a piece of residential real estate, you find three comparable sales within the last 90 days, comparable in area, comparable in attributes and comparable in square footage. And you adjust for square footage. If one's a five bedroom, one's a four bedroom, one's got six baths, one's got four baths, one's got a five car garage, one's got a three car garage, you adjust for the differences and you do that, and then you take the average of those three after adjustments and you have a residential appraisal. But the qualification is all three of those comparable sales cannot have had a buyer or a seller under duress. So you can't use two foreclosures in the neighborhood.

[Co-host]

Gotcha.

[Dave Ramsey]

As your comp. As your comparable sale. Otherwise you have an invalid appraisal.

[Caller]

What they do in 2008 when whole neighborhoods were getting wiped out, well, then.

[Dave Ramsey]

You'Ve got a new market. The market established that this neighborhood is foreclosure neighborhood, okay? So it drove it down because everything in there was. So if you had like those townhouses and stuff where they, you know, where these bogus investment deals, that's what all happened in 2008. And the mortgage, bank securities, all that crap crashed. And so they started punting on these loans left and right. And so they end up with whole neighborhoods back. Now you got a complete reset on that neighborhood. But that's not a statement of real estate. That's a statement on that neighborhood. That neighborhood was full of investment real estate. 100% renters and 100% of the investors in air quotes were leveraged. Walked away.

[Co-host]

Right?

[Dave Ramsey]

And so now you gotta reset. And now we've got, okay, what will people pay in that neighborhood?

[Co-host]

That.

[Dave Ramsey]

Where neither are under duress. And that takes about a generation to get through that. Not a generation of people, but a generation of sales. Because the bank, when they take it back, they're under duress, okay? So when the bank resells it, you can't count that. That's a real estate. Owned an rto. You can't count that as your appraisal. And so that's what we're getting into. So, no, we. That's what this thing I just said go to our website. We track this stuff. There's 1,036,101 homes on the market right now. We know exactly how many are on the market. We know exactly when we're tracking all this stuff in detail. And you can go there and find the actual data and, and month over month over month, every month this year, median house price, which is the middle, not the average, it's the middle of house prices is what a median is in statistics. Has gone up every single month. It's not gone up much. It's gone up like a thousand bucks.

[Caller]

Or 2000, but it's not crashing like every month.

[Dave Ramsey]

It's not going down is the point. It's going up. And there's good inventory and there's good Demand. And everybody's sitting around waiting to see if the Fed chairman is really going to get fired and if we're really going to see some interest rates adjusted. And once they get past that waiting game, probably about September, you may see this market take off like a dad gum heroin fire thing. September could be wild in terms of house prices going up again. But we're not. We've been telling you guys this out there and it's proven to be true. I've been telling you this for five years. House prices are not going down. This is not a bubble. A bubble is when there is an. Is when the prices have gone up faster than the demand. Demand has outpaced inventory. Demand is higher than supply. Every time you see that in economics, you see prices go up. It's a simple thing. It's seventh grade economics, if anybody taught economics in seventh grade anymore. But that's it. I mean, when there's a shortage of goods or services, the price goes up on those. When there's an overabundance of goods or services, the price goes down on those. It's very simple. And you really can't hardly figure out any time in economics with an open market anyway that that gets violated. It just shows up that way every single time given a, given a half a minute. But I mean, you get weird anomalies like Covid and that kind of stuff that hit a marketplace. It takes a little while to get the wrinkle out of that, out of the sheet on that like the supply chain stuff. Same thing. But the, this is, it's just, it's. The problem is everybody's just so frustrated that wants a house and can't get one right now.

[Caller]

Sure.

[Dave Ramsey]

So they're throwing all these darts out there that they call truth to try to make themselves feel better about it. And it's just not, it doesn't change anything. You still have to do the math. Create your free every dollar budget today. The simplest way to budget for your life.