Is a Real Estate Depression Coming?

SPEAKER_1 (0:01)

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Michael Zuber (0:30)

All righty, folks, Mortgage Business Association is warning us that 2027 is going to get nasty. If you don't know who they are, they're the people that really track the mortgage market. And they now say that we will have interest rates over 7% all year. They are telling us that mortgage origination, yes, the business that they watch will be down 30%.

Folks, that is depression level stuff.

So we're going to talk to Casey from Brick By Brick and say, what the heck should investors be doing in a higher and higher rate environment? Because I think it might surprise you. So Casey, again, the headlines seemingly keep getting darker and darker and darker for the real estate world, but what are you doing? What's going on?

Casey (1:15)

So, you know, I help new investors, right, with their first rental. So all of this mortgage interest rates, buying properties, the real estate market is all new to a lot of them. And it's the first time they're really paying attention to it, because they're investing now.

And I have new students, newish students saying, maybe we shouldn't buy, maybe now's the right time. We should wait. Oh, Casey, we're not going to find any deals. I should have bought deals last month when I was doing, you know, doing the work, running my numbers, learning my market. Oh, man, I was cash flowing like on paper. It was so good now, it's terrible. And we should wait. We should just wait. We're not going to get anything.

And, you know, I say, look, we are entering, like, this is a great market for investors. When people are running for the hills, when they are saying, it's time to quit, it gives them the chills. That is the time to dig in deep and get the deals done. I mean, we're in a buyer's market. Oh my God, people are not wanting to buy real estate. They are sitting on the sidelines. We're entering winter too, double whammy, high interest rates, and winter.

I mean, properties are going to sit. Investors are going on vacation for the holidays. They're going to pick back up in February and March. I know this. So now is the time, if you can get through the holiday slump and just keep going strong, make your offers, under asking, properties sitting on the market more than 30 days, like, don't let this scare you.

Michael Zuber (2:45)

Yeah, it's funny. I have so many thoughts here, but I want to bring up, I'm guessing you know who our adventure consulting is, Nick Gurley. I'm assuming you know who that thing is.

Casey (2:56)

I don't follow them a lot, but.

Michael Zuber (2:57)

You know who it is. Yeah.

And you don't follow him because he's a doomer. He's a crash bro.

Casey (3:02)

Yeah.

Michael Zuber (3:02)

I would argue that Nick's the original crash bro. But the reason I'm bringing him up here is he was just on the iced coffee hour and he let Graham and Jack know that he bought a house in Atlanta.

But here's the magic. He bought a house for $160,000 under list price.

Casey (3:25)

Nice.

Michael Zuber (3:26)

If we have a crash bro buying a home right now, isn't that a signal that it's like a really good time to buy? I mean, hello.

Casey (3:37)

Yeah.

This is just a great time to buy. I mean, now I will say depending upon your market, right? There are micro markets all over the place. So maybe your market is hot. I still have students buying in Ohio. And so Ohio is great. You're getting appreciation, you're getting rents going up, you're getting property selling within days. So it's unlike a lot of other markets like the South, stuff sitting, houses are sitting. And I mean, I just bought this expensive lake house a couple of months ago, but dang it, I really want to go out and get more, but I've got to get this other one under my-

Michael Zuber (4:14)

You've got a little work ahead of you.

Casey (4:15)

I'm spending money like this, okay, right now. But depending on what market you are in, like the South is hurting, and you can really get some good deals right now under ASPI.