Recession Indicators Go Off, Is the Housing Market Safe?

On The Market

BiggerPockets

Investing, News, Education, Business

4.8 • 858 Ratings

🗓️ 2 September 2024

⏱️ 47 minutes

🔗️ Recording | iTunes | RSS

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Summary

Recession fears are increasing. The stock market has taken substantial hits, housing inventory is climbing, and bank account balances are starting to fall. So, with more economic turmoil, we have to ask: will the housing market crash? And if we get a housing market crash, how bad (or good) will it be for investors? Could we see a 2008-style selloff, or should we be more prepared for small dips worth taking advantage of? Today, we’re asking two top investors these questions, one of whom literally wrote the book on Recession-Proof Real Estate Investing. J Scott and James Dainard join us on today’s episode to discuss market crash predictions, scenarios, and opportunities for real estate investors. Both J and James experienced the 2008 housing market crash—an economic event almost impossible to forget. But is 2024 shaping up for a sharp decline like 2008, or will we simply see a slower real estate market like most people had expected when interest rates began to rise? If the market DOES crash, what should you look for to take advantage, and how do you ensure you don’t get caught biting off more than you can chew? J and James break down their game plans if prices fall and why buying now could set you up for wealth ten years from now, IF you can handle the “fear” of buying when others are running from real estate. In This Episode We Cover New housing market “crash” predictions and how low prices could go Why economic “fear” is rising now, and the recession indicators that are going off Rising housing inventory and why experienced investors expected this already The difference between the 2008 housing market crash and today What could cause a housing crash and how to know it’s time to buy The immense opportunities for investors that 99% of Americans will pass up And So Much More! Links from the Show Join BiggerPockets for FREE Let Us Know What You Thought of the Show! Find Investor-Friendly Lenders See Dave and James at BPCON2024 in Cancun! Dave's BiggerPockets Profile James' BiggerPockets Profile J's BiggerPockets Profile Why Has the Housing Market Not Crashed in Over 15 Years? Grab J’s Book “Recession-Proof Real Estate Investing” Jump to topic: (00:00) Intro (04:01) New Recession Fears (14:25) Is This Like 2008? (18:05) What Will Cause a Crash (31:11) What to Do During a Crash (36:56) Opportunity for Investors Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-248 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	Hey friends. If you tuned into our last episode, you heard a friendly debate between the panelists and myself about whether or not we're in a recession.
0:10.4	And we were sort of talking about this large, higher level economic discussion, but we didn't really get into whether or not the housing market would decline.
0:19.2	And that's honestly a different question. Recession and housing market, sometimes they move in the same market would decline. And that's honestly a different question, recession and
0:22.2	housing market. Sometimes they move in the same direction. Sometimes they actually move in opposite
0:26.6	directions. So today I'm actually going to share with you a special crossover episode. This
0:32.9	aired originally on the Bigger Pockets Real Estate podcast where myself, James, from this podcast and Jay Scott, who you may know from the Bigger Pockets Real Estate podcast, where myself, James, from this podcast and
0:39.7	Jay Scott, who you may know from the Bigger Pockets universe, debated whether or not we are likely
0:45.0	to see a housing market crash. But we also did some scenario planning about if the market
0:50.8	crash, what would you do? What would have to happen, first of all, to make the market
0:54.8	crash and how would you react if prices started to go down in a pretty significant ways?
1:01.4	And we had that conversation and loved it so much that we're going to bring it here to on the
1:07.0	market. And what we're going to talk about is the history of the market and housed today's conditions
1:11.3	compared to previous recessions, the important distinctions between an economic recession and
1:16.6	a housing market crash, and a new theoretical graph from Jay Scott, which is always interesting,
1:22.6	and will probably change the way you think about the economy.
1:25.8	So today we're going to bring that conversation to you.
1:33.3	But before we do that, I wanted to tell you a little bit about what actually happened in 2008
1:38.5	to ground our conversation, to provide a little bit of context, and help you fully understand
1:43.3	the conversation that Jay, James, and I are going to have.
1:46.8	In 2008, the world witnessed one of the most significant financial crises in modern history,
1:52.6	and it all started with the housing market bubble.
1:55.9	Throughout the early 2000s, banks issued risky mortgages to many borrowers who couldn't afford them and maybe didn't
	...

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