The 2027 Market Crash? What You Need to Know Now

Michael Zuber (0:00)

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Dion (0:22)

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Michael Zuber (0:27)

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Michael Zuber (0:58)

Alrighty folks, it looks like 2027 is shaping up to be a nasty year in lots of parts of the economy. We just had Paul Tudor Jones come out and say he's gonna be short the market the entire year. If you don't know who Paul Tudor Jones is, Google him, because he is one of the best of the best, and he's going short. He's talking about investment flows reversing, causing a tsunami of stock shares, which is not good. We just had a very hot CPI and an even hotter CPI core. Now the odds of a rate increase this year have gone up. We're talking 50 basis points in 2026, with another 50 basis points in 2027 We just heard that foreclosures are up 42%.

MBA, Mortgage Business Association, says that originations will crash, crater, whatever you want to call it, $300 billion in 2027

Inventory is up, demand is down. And I want to talk to the three amigos about what of that scary list is concerning? What is a nothing burger? And most importantly, how should somebody navigate it? And I just remembered, I forgot about unemployment going up. Which it did in the last month. So just lots and lots of nasty headlines. Matt, what of those, of any of that scare you the most? And maybe I missed something, and we'll go to Dion after.

Matt (2:21)

I just missed, I was 12 months off. I missed it.

Michael Zuber (2:24)

You missed it. I did.

Matt (2:26)

I mean, all the stuff I expected to happen last year happened more slowly and it's happening now.

So, you know, kind of like we were talking about, kind of Q4, you know, basically expected it. And, you know, so everyone said when rates were 5.9, they were going to go lower. And, you know, we had all had our call. And I said, I think we're in the sixes and probably sevens. And here we are.

Michael Zuber (2:48)

And the eights might not be far away, given the movement today.

Matt (2:52)

Yes, scarily. So, I mean, the eights is I didn't predict eights. I thought we would get into the sevens, you know, but I think that it's really it's counterintuitive. But I've doubled down.

I'm spending more time and more money now trying to find deals. There's ones coming to the MLS, but the math doesn't work based on 7.5% interest rates. A lot of it doesn't. And so the good news is, is that that allows you to have that conversation when you have a good broker, when you have a good team in place, you have the conversation and say, listen, at five, nine, I liked it. At seven, five, I hate it.

Dion (3:29)

Right.

Matt (3:29)

So now we have to be like the like we're counting what the payment was at five, nine.

Dion (3:34)

Exactly.

Michael Zuber (3:35)

We're going to have to be less.

Matt (3:36)

We have to be discounted to that. So it's like, what would the payment be at five, five? And that's them, how we're working backwards to get to the number of costs.

Michael Zuber (3:46)

And that's magical. And that's what I think all investors do, because if you can make the deal work at seven and a half or even eight, yes, back to the five, nine, nine payment, you're not only going to win today, but sometime in the future, I have a fairly certainty in the next decade, rates will not be eight percent, and you'll be able to refi and you just suck all that gravy.

Matt (4:09)

Yeah. Well, not only that, but that's going to be the impetus for what makes the market start to go up. Right. Like, you know, you know, the curve with with lending and then with the rates are. And then that starts to impact the values because people are buying payment. But then all of a sudden, rates stop.