In this video, two speakers analyze the current state of the real estate market, discussing mortgage delinquency rates, the impact of institutional investors, and the need for adaptation in changing times.
The first speaker questions the premise of a recent post claiming that there will be more delinquencies in the future, pointing out that the severity of delinquencies has been decreasing year after year.
The second speaker highlights the importance of looking at data rather than emotion, and notes the role of realtors in the changing market, where they may need to focus more on renters and diversify their offerings to stay relevant.
The speakers also discuss the need to adapt and learn in the real estate industry, and the benefits of having overlapping skill sets.
Transcript:
Chris Bounds 00:00
Someone else posted a delinquency mortgage delinquency, and they compared 2020 2021 and 2022 compared to 2029. Now, the premise of the text above their post was how like, there’s more delinquencies coming. But I questioned it. I’m like 2020 through 2022, the delinquency rate has been dropping every single year. And then the 2022 rate compared to 2009, in almost every category is less than half of what it wasn’t Oh, nine.
I was like, so where? Where are you getting how you making that conclusion? And beyond that, it’s institutional investors are now that they’ve been putting their money in real estate. And that’s been a part of the problem of rapid appreciation, you may get institutional investors buying up entire subdivisions, the bill to rent. And I mean, it’s been happening forever and multifamily, but now on single handedly, it’s scale. So I think any slack and inventory, don’t gobble it up. Yeah.
Kobe Xin 01:11
And that’s not that’s not a good thing. If, right. So I mean, I guess we all have,
Chris Bounds 01:15
it isn’t. But it also is meaning, I don’t necessarily like I think people should have the ability to buy a home. But ultimately, these are the cards were dealt. And if someone’s not going to buy it at the end of the homework, because institutional investors, they’re chasing yield, they’re trying to protect their money from inflation, and make a profit. And right now real estate has just has one of the best options available to them. They’re not investing in tech. They’re not investing in like VC, you know. And so those kind of markets have softened a little bit. stock market’s been pretty volatile. So real estate’s just a good hedge on that.
Kobe Xin 01:57
Definitely. Well, we’ll see moving forward, right, because, but But I mean, I think what you what you mentioned is very important, because you’re looking at data, you’re not necessarily looking at a motion, where a lot of people are making these, these assumptions based on emotion, what they want to happen, what they don’t want to happen. And they’re not looking at the data. So like, what you’re looking at, like the inventory rates, and then also new new consumers coming to the market. That’s kind of what I was mentioning, in the very beginning of the podcast, when I said, you have a really good insight on what’s going on the economy from a macro scale.
I think that’s that’s what I was taught that also I was alluding to, is a lot of people are kind of just looking at it from their own perspective, you know, maybe as an agent or an investor and you know, how am I a crash affect them personally, and, you know, for investigators that can be a positive thing with prices going down for realtors, that could be a horrible thing with you know, no longer having the ability to list as many houses and they’re just kind of looking for evidence that will support whatever they want to happen.
Chris Bounds 02:55
You know, realtors tag on that, like realtors? Yeah, it definitely affects them from a listing standpoint or like a sales standpoint, but where they can make up it’s gonna be more work printers, they’re just gonna have to focus a little bit more mentored because printers these percentage of them will become buyers. So they can help out with that maybe they also going to diversify to on working like with manufactured homes, home sales or tiny homes or or stuff like that.
So it’s a changing market and you’re just ultimately if you don’t change with it, you get left behind that’s the Who Moved My Cheese story. Like we just have to adapt because if you get too comfortable, which I was there I was too comfortable with flips that’s why I didn’t go over into multifamily mobile home parks self storage units when my buddies did. I watched and you know, I think it probably should have made the move sooner. But at the end of the day I was comfortable that’s fine. I mean just learn and adapt as it go.
Kobe Xin 04:01
Right learn to adapt that it’s it’s better in my opinion, they’ll have like skill sets that are overlapping even overlapping within like, like industry than dentists to just be like very focused on like trying to combat security. So if you have like skill sets that transcends industries and timelines, I think that’s probably the most important asset anybody can own. On top of you know, owning real estate right?