871: BiggerNews: Why the Crash Predictors Are Wrong About a Foreclosure “Crisis” w/Rick Sharga

BiggerPockets Real Estate Podcast

BiggerPockets

Education, Investing, Business

4.8 • 16.6K Ratings

🗓️ 12 January 2024

⏱️ 48 minutes

🔗️ Recording | iTunes | RSS

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Summary

Everyone keeps talking about an incoming surge of home foreclosures. Over the past few years, online crash predictors shouted from the rooftops about how another foreclosure crisis is always on the way, and we’re only months from a full-on meltdown. How much of this is true, and how much of it is pure clickbait? We’ve got Rick Sharga, Founder and CEO of CJ Patrick Company, one of the world’s leading housing market intelligence and advisory firms, on the show to tell us what the data points to. Ever since the pause on foreclosures during the pandemic, homeowners have been getting win after win. They were able to save up plenty of cash, their home values skyrocketed, and they could refinance at the lowest mortgage rates on record. Now, with high rates, still high home prices, and steady demand, homeowners have most of the power, EVEN if they’re behind on payments. But, as the economy starts to soften, could the tapped-out consumer finally force some homeowners to default on their loans? In this BiggerNews episode, Rick will give us all the details on today’s current foreclosure landscape, walk us through the three levels of foreclosures, give his 2024 foreclosure prediction, and share the economic indicators to watch that could signal a coming foreclosure crisis. In This Episode We Cover: A 2024 update on foreclosure rates, defaults, and Rick’s foreclosure forecast for next year The three levels of foreclosure and why most homes WON’T ever be defaulted on Rising consumer debt and what happens as more Americans default on their credit card and auto loans Housing supply and whether or not a foreclosure crisis could finally give us some inventory Economic indicators to watch that could signal a rise in foreclosures How to use your home equity to invest in real estate (WITHOUT putting yourself at too much risk!) And So Much More! Links from the Show Find an Agent Find a Lender BiggerPockets Youtube Channel BiggerPockets Forums BiggerPockets Pro Membership BiggerPockets Bookstore BiggerPockets Bootcamps BiggerPockets Podcast BiggerPockets Merch Listen to All Your Favorite BiggerPockets Podcasts in One Place Learn About Real Estate, The Housing Market, and Money Management with The BiggerPockets Podcasts Get More Deals Done with The BiggerPockets Investing Tools Find a BiggerPockets Real Estate Meetup in Your Area Expand Your Investing Knowledge With the BiggerPockets Books Be a Guest on the BiggerPockets Podcast Ask David Your Question David's BiggerPockets Profile David's Instagram Dave's BiggerPockets Profile Dave's Instagram Catch Dave on the “On the Market” Podcast Books Mentioned in the Show Start with Strategy by Dave Meyer Pillars of Wealth by David Greene The One Thing by Gary Keller Connect with Rick: Rick's LinkedIn Rick's X/Twitter Rick's Website Click here to listen to the full episode: https://www.biggerpockets.com/blog/real-estate-871 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is the Bigger Pocket Podcast Show 871.
0:05.0	What's going on everyone is David Green,
0:06.3	your host of the Bigger Pocket's real estate podcast.
0:08.8	Joined today by the Data Deli himself, Dave Meyer, and when you've got Dave and David together, you know what that means.
0:16.4	It's a bigger news podcast.
0:19.5	In these shows, we dig into the news, the data, and the economics impacting the real estate industry so you can use that
0:24.8	information to build your wealth. Dave, welcome to the show.
0:28.0	Thank you, David. I appreciate it. I'm excited as always to be here, but today I am particularly excited because our guest is one of my all-time favorite guests his name is Rick Sharga and if you haven't heard him on any of our shows before Rick owns CJ Patrick.
0:45.3	It's a company that focuses on market intelligence and data economic research all
0:50.6	specifically for real estate investors. So all the work he and his team do is extremely relevant for the
0:58.0	both of us and everyone listening to us. And today we're going to dig
1:02.1	into some of the research he's done specifically around foreclosures in the US and what's going on in that part of the housing market.
1:10.0	And after the interview, make sure you stick around all the way to the end of the show because Dave and I handle a question seeing green style at the end of the podcast about a listener who's trying to figure out if they should use a helock or a cash out refinance to scale their portfolio. All that and more on today's epic show. Let's get to Rick.
1:27.6	Welcome to the show today, Rick. Excited to talk about foreclosures, that's always a fun topic for real estate investors to get into. But before we talk about where they're at today, let's talk a little bit about historical foreclosure activity. What can you share with us?
1:41.0	Yeah, thanks for having me on the show.
1:43.0	Always good to talk to you guys.
1:45.0	Foreclosures are an unfortunate reality in the mortgage industry.
1:49.0	Typically, people do pay their mortgages on time and regularly, but about 1 to 1.5% of loans at any point in time are usually in foreclosure.
2:01.2	And about 4% of loans are delinquent but not yet in foreclosure.
2:06.8	We saw a huge spike back leading into the Great Recession about 10 years ago where foreclosure rates actually approached about 4%
2:15.0	of all loans, which was just remarkably high,
2:18.0	and about 12% of loans were delinquent.
	...

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