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The housing market is undergoing a correction, demand is changing, and interest rates are continuing to rise. All of this leads us to ask one question: if we are at risk of a major recession, how can we protect ourselves and our investments to weather this downturn?
To get a better picture of what’s going on in our economy, I’ve reached out to my good friend Daren Blomquist. Daren is the in-house economist for Auction.com, where he sifts through real estate data for key insights and trends to help businesses and consumers make better decisions. He sees what institutional investors are up to, what retail buyers are doing, and where foreclosures are happening–to name just a few things that he’s always keeping an eye on.
In today’s conversation, Daren and I talk through our risk of recession and specifically how this affects the housing market. You’ll learn all about the macroeconomic patterns that set the stage for a recession (and how to clearly see them yourself), what has to happen for supply and demand to come back into alignment, and where housing is headed in the wake of 2020 and 2021’s skyrocketing property values.
Key Takeaways with Daren Blomquist
- Why many economists are increasingly convinced that we will see a recession in 2023.
- How housing uniquely contributes to negative GDP.
- Why housing is a great indicator of a looming recession–and what made the Great Recession between 2007-09 so uniquely awful.
- Why housing prices are likely going to continue to appreciate in certain places and what’s going to keep demand for apartment rentals strong.
Daren Blomquist Tweetables
- Follow Daren Blomquist on LinkedIn | Twitter
- Zelman & Associates
- Attom Data Solutions
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Click Here to Read the Transcript with Daren Blomquist
Josh Cantwell: So, hey there, everybody. Josh Cantwell here, your host at Accelerated Investor. I am really excited today to be back with you. And today we’re going to talk really high macroeconomics and what’s going on in the marketplace. I’ve asked my good friend and a very regular contributor to the podcast to join us. His name is Daren Blomquist. He is essentially the in-house economist for Auction.com. Daren works with all of their reporting. Not only is Auction.com a platform that you can go buy properties on but you have to think auction really has two types of clients. They have the institutional investor that’s listing and selling their auction properties, a lot of foreclosure properties on their platform. And then, of course, they have the buyers, a lot of residential retail buyers, investor buyers. But Daren heads up essentially all of their data, everything that hits the news, and everything that comes out of their market research department. So, Daren, thanks for carving out a few minutes for us to help us and our audience educate on what’s going on in the marketplace. Thanks for being here.
Daren Blomquist: Yes, thanks for having me, Josh. Always good to chat and get your perspective, too.
Josh Cantwell: Yeah. Thank you. Yeah. Thanks for all I see the stuff you’re tagging me on, on LinkedIn and I’ve tried to share and tag you on those types of things on LinkedIn and Facebook. So, listen, today, guys, we’re going to cover the increasing risk of recession. We’ll talk about the housing market and the correction that’s starting to materialize and also this shift in distressed demand trends. So, Daren, let’s talk about this recession. You know, recessions are part of a normal economic cycle but our economy since really 2000, if you think about when the stock market burst, the tech bubble burst, could have been anything but a normal cycle, 2001, 2008, and then, of course, the long bull run we had and then COVID. And then now obviously this rising interest rate environment, rising inflationary environment. So, let’s just talk for a quick second about this rising recession risk. What are some of the information and the market research that you guys have done? What are some high-level things that we need to know based on the data that you guys have aggregated together?
Daren Blomquist: Sure. You know, actually, this is data from the New York Federal Reserve, and it’s using the most tried and true recession indicator over time and you can see it here in the graph is basically the yield curve. And they’re specifically looking at the difference between the ten-year Treasury yield and the three-month Treasury yield. And then they turn that into a – basically when that goes negative, inverts, then the recession, that usually finds a recession but they turn it into a percentage likelihood of a recession. And as that spikes to about 25% to 40%, you typically see a recession following that. And almost every recession you can see going back, which is the gray bar is there, if you’re viewing this, this goes back all the way to 1960. And there have been several recessions, obviously, since then. But, yeah, right now, this indicator actually spiked before the very short recession we had during the pandemic. Even before, you know, this was 12 months in advance so this recession indicator spiked back in 2019, indicating that in 2020 there would be a recession. And that was long before COVID really became an issue. So, it was present there even without really taking into account the strangeness of that recession.
But, again, now we’re seeing for August 2023. So, the latest data is from August 2022 predicting out to August 2023. There’s a 25% chance of a recession in August 2023, according to this indicator, which has been highly reliable. And you’re seeing more and more economists and others starting to jump on the recession bandwagon for 2023. And so, we look at a lot of other forecasts and 12 months ago, six months ago, even, it was tough to find an economist who said there’s going to be a recession in 2023. But we are seeing more and more of that and this indicator, I think, cutting through the noise of all the different forecasts that are out there, this indicator is the best one to tell us that there is a recession coming.
Josh Cantwell: And I wonder, Daren, from your perspective and some of the data that you look at, you know, recessions are defined, right, by two successive quarters of negative GDP growth. And if we look at some of the content that’s come out of the White House or out of the Federal Reserve, they say that we’re not in a recession. Even in the last two quarters of GDP growth was already negative because the unemployment rate is so low still, you know, hovering around 3.5% to 4%. You know, housing price is up until very recently. We’re still moving up. You had a lot of positive economic news from consumption. And now all of the sudden, it seems like there’s a whole bunch of different moons or worlds that are colliding from the war in Ukraine, energy crisis, cost of energy, higher cost of everything, including food, gas, cars, houses. We have an affordability issue with living standards. There’s not a lot of that is positive other than it just still feels like people are flush with cash. People still have a lot of money in their savings. It would seem it’s like anti-recession talk.
Daren Blomquist: I mean, I would call it, yeah, there’s debate about whether this is the two consecutive quarters, as you mentioned, of negative GDP growth is actually a recession, which seems like, well, you can’t really change the definition but at the same time, I can see the point because it doesn’t feel like a recession because we are still coming off the sugar high of all the stimulus. And if you look at, basically, the stimulus put a lot of money in people’s pockets that still hasn’t been burned through quite yet and I think that’s what’s helping. And then if you look at the GDP numbers, what’s really driving the negative GDP growth is the residential fixed investment. And so, it actually is the housing side of things that’s driving the most of the negative GDP growth. And so, I think we’ll see that. Whether we’re in a recession or not for real now, we’ll see more of a typical recession next year where you do see unemployment rising and some of the other sectors of the GDP measurement going down as well, not just the housing piece of it.
Josh Cantwell: So, you’re saying that one of the drivers of negative GDP growth is actually things around housing, meaning construction, new building materials, sales, labor. Because of the rising interest rates, it sounds like you’re saying that developers have pulled back on some of their development plans. The houses are not selling as fast and as easy as higher prices. People are maybe not improving their homes who are living in them as much as they used to. It sounds like that is all pulled back already and that’s part of the driver into negative GDP growth. Did I get that right?
Daren Blomquist: Yeah, you got that right. And I think we have the next slide does show it’s a great slide from Zelman housing research that they’re actually pretty bearish on that more than other economists out there but their point is during the last recession, leading into the last big recession, 2008, and they’re not saying and I’m not saying that what we’re going to see next year is going to be like that exactly in any way but their point is that the housing is often leading the economy. And so, their point here is that they have a housing demand proprietary measure, which is the line there and it peaked basically in late 2005. You didn’t see job loss. The first sequential decline in nonfarm payrolls there is about the first quarter of 2008. So, over two years, almost three years later, before you saw that job loss. And so, yeah, the point simply being that housing is often a leading indicator. And of course, people would argue that last time housing was the leading indicator because that’s what the house of cards or the first domino to fall because of this unique situation with the mortgage industry, mortgage products last time.
But they actually went back in another slide and showed that in previous recessions as well that housing component of the GDP typically fell first before the other components of the GDP went negative. So, housing is often actually a leading indicator. The other piece of all of this, and you’ve referenced it a couple of times that gives me maybe confidence isn’t the right word but more certainty that there will be a recession next year is that the Fed is highly committed to bringing down inflation and they’re even willing to sacrifice, basically, a recession in order to fight that inflation. They see inflation as the bigger issue. And I would agree with that but that also gives me certainty that we’re going to very likely see a recession next year.
Josh Cantwell: No doubt. I look at the slide and this is going back to 2005. And again, if you’re on Spotify or you’re on iTunes and you’re just catching the audio version of this, definitely check this out on YouTube or anywhere you get your videos because there’ll be a video portion of this. But what’s interesting is it looks like around the third quarter of 2005, the seasonally adjusted peak in unit demand for housing hit its peak. I think we all know that we hit our peak for housing demand during this bull run about six months ago. Maybe three months ago, we absolutely hit the peak as interest rates started to push up. The Federal Reserve started pushing rates around February of 2022. And when I look at apartment buildings, me and the brokers that I work with, we all feel like the peak of the apartment market where people were paying the most, there were multiple offers over asking price, there were basically bidding wars for apartment buildings, that was in August of 2021. It was actually over a year ago.
And that was when you could list a house or list an apartment building, I should say, and there was a whisper price from a broker, and the broker would say, “This is what we think it will trade for but it will trade for market price. But we think it’s going to sell for about X, call it 20 million.” And all of a sudden, back in August 2021, the property would sell for 21 million, 22 million, 24 million. There was multiple offers over ask. Same thing with residential housing, although that kept going for a few months, maybe six months thereafter from August 2021 until early part of 2022 but it definitely has peaked. So, that’s one indicator that matches from what you’re seeing on the screen to now. The second one, Daren, is the two-year, the ten-year Treasury yield inversion that happened in essentially Q4 of 2005. That’s also now happened in this economy. That happened, Daren, I can’t remember when it was. About a year ago, correct?
Daren Blomquist: Yeah, that one. Actually, that’s a slightly separate yield curve than the first slide we showed but, yes, that actually has inverted, whereas the three-month versus ten-year has not yet inverted. But yeah.
Josh Cantwell: Now, you’re seeing some of the coastal what we call boom-bust markets are actually seeing a decline in existing home prices. I know you were going to cover that, Daren, on another slide at a different time but you’re starting to see the stuff along the coastlines, California, Vegas, the traditional boom markets, Arizona, Florida, some of those New York, New Jersey where prices are actually they’re not crashing but they’re coming down by upwards of 8% to 10% year-over-year. So, that now is a significant duplicate event that happened 15 years ago in 2005, and it’s happened now again in 2022. So, now we’re going to start to see, as Daren mentioned, might be two or three years from last summer. If we consider late last summer, the peak might be in 2024 that you see where there’s a significant decline in payrolls, where the unemployment rate is going up substantially. Okay. And if you’re looking at all this as a leading indicator and you’re saying, “Okay. Well, where’s the stock market going to go?” Well, the stock market if it was following housing, it was really three years after the seasonally adjusted peak in housing demand when the S&P 500 finally troughed out.
So, a lot of people are saying, “Well, is the S&P 500 at its bottom?” Well, if a lot of these factors will probably mirror each other, I’m not sure exactly if they will, nobody knows for sure, but some of it will, and if that’s the case, it’s hard to believe that the S&P 500 doesn’t have some room to continue to go down based on where we’re at, especially going, like you said, Daren, with all of the stimulus money that still hasn’t been spent, companies that are producing profits. Once people start losing their jobs, those profits will go down and the stimulus money will run out then those stock market prices will continue to drop. So, those are some of the connections that you’re already starting to see here.
Daren Blomquist: Yeah. I would agree with all of that. Yeah. I was just looking at that ten-year Treasury minus the two-year that it went negative slightly in April of this year. But it’s basically since early July, it’s now been inverted. So, that’s that piece there near the beginning of 2006 in this scenario. And, yeah, things are, you know, as they say, history doesn’t repeat itself but it rhymes. So, I wouldn’t expect the pattern to look exactly like this but I would expect some of these things to parallel what we saw back in 2006.
Josh Cantwell: I think the difference will be, right, that the housing even apartment buildings like what I invest in and that those prices stagnating are going down, the good news is that the banks aren’t really healthy and the banks can still continue to lend. If you remember, in 2007, 2008, 2009, the banks literally had no liquidity, so they just could not lend, period. So, the restrictions got so tough where people had to have income assets, multiple years on a job, no evictions, no foreclosures, all these different types of things. It was very hard to get a loan. They made the restrictions very difficult. Right now, you’re seeing banks still want to lend. They still want to put money on the street. It’s just at a much higher rate. And the question now becomes just like in 2007, 2008, 2009, people were starting to lose their houses because of adjustable-rate mortgages and they couldn’t afford them. Now, the question will be while prices have to come down, because as you know, Daren, the banks have a ratio, right? It’s usually around 40% to 42% of your income that can go towards debt, your debt-to-income ratio.
Well, if the cost of your debt is significantly higher, then you’re going to hit that threshold much faster, which means you can only afford a maximum amount of home that will force prices down because demand will be down. Right? Then it’s like, okay, well, how fast do those prices come down, and does it affect anybody who wants to give up on their home because now they’re overleveraged, right? In 2007, 2008, 2009, people are just basically giving up on their houses, turning them back into banks, giving away the keys because they had no equity left. And it’s tough to tell somebody, hey, you have to keep your house if there’s no equity in it. It’s tough. So, we’ll see what happens there over the next couple of years. But, yeah, this leading indicator is a really cool thing to look at, especially, you know, being a housing geek like we both are, Daren. I like to look at that as an indicator for sure. Anything else on the slide we should take a look at before we move on?
Daren Blomquist: Well, just, yeah, I mean, you’re starting to see some changes. Fannie Mae just came out with a forecast this week, I believe earlier this week, where they, first of all, they changed their forecast from the month earlier from home prices going up 4% in 2023 to now going down at 1.5% in 2023. That’s nationwide. And they also then upped their unemployment here to getting close to 6% in 2023. And so, that unemployment piece is, as you kind of referenced earlier, that’s a foundational piece around the distressed market that we specifically look at. And if you have that combination of higher unemployment and falling home prices, that is that situation where things can shift pretty quickly. People have a lot of equity in their homes right now and they’re able to make their mortgage payment because they have a job. But if you see that shift the other direction, I think people might be surprised, especially in certain markets, how quickly that calculus can change, where homeowners fall below that equity line and also don’t have it. They basically have the two triggers for falling into foreclosure, which are loss of income and then loss of asset value.
Josh Cantwell: Yeah. That’s interesting where people will give up on a property and let it go to foreclosure, right?
Daren Blomquist: I mean, I think there is a big difference. A lot of the mortgage part to this, there’s not a lot of the adjustable rate mortgages where people are going to experience payment shock or negative amortizing loans, which was common late into the last or helping to create the last housing bubble. We don’t have those. And so, that’s another element of another trigger that we don’t have this time that I think will keep things more under control. But you do have two major triggers potentially if that Fannie Mae forecast is correct and we see that combination of rising unemployment and falling home prices.
Josh Cantwell: Yeah. Daren, what do you make of the fact that regardless of people’s incomes, whether they are employed or unemployed, whether rates are higher or lower, we still as of the last time you and I recorded, we were still millions of units short to satisfy all the demand in this country for affordable housing. You know, people needed homes built, the builders needed to build in order to satisfy the demand for housing. People still have to have somewhere to live and people were forced into apartments because the single-family home market got so expensive. So, the fact that there still is an affordability issue, these prices you think would come down but we’re still short of just the total number of units we need just to house everybody.
Daren Blomquist: Yeah. I mean, it kind of depends. The consensus is that we do have a housing shortage. And I would say there’s a lot of data to support that. Actually, Zelman here would argue that we are moving into a decade, this decade, where we’re actually going to have to quickly shift to an oversupply of housing but that’s a whole another argument that maybe we don’t want to get into. But generally speaking, if you take the consensus, yes, we do have an undersupply of housing and that’s also going to be kind of a floor for the housing market. But to get there, you do have to have that affordability component, which at this point, the only thing that’s going to help that affordability component is lowering the prices or prices coming down and to make housing more affordable. And so, I think something’s got to give and the Fed is kind of forcing the issue with the rising interest rates. So, you have that floor but there is, I think, a little bit of a reckoning in terms of what we were experiencing during the last two years was a little bit of a fantasyland that cannot continue.
We have to come back down to earth and as long as the market can come back down to earth, hopefully, it’s a soft landing but there is going to be some price adjustments that would be absolutely I think the best scenario to then get that supply and demand more in line with each other.
Josh Cantwell: It’s amazing to me that so many of these boom-bust scenarios, the 2008-2009, obviously the one we’re now, primarily just caused by in a lot of ways the Federal Reserve and their ability and desire to keep interest rates low and money flowing too much, right? So, if they had raised rates going back a couple of slides, if they had started to raise rates in 2016-2017, Trump’s in office, the economy’s pretty good, gas prices are really low, but they still kept the Fed funds rate at damn near zero.
Daren Blomquist: Yeah, they did. I mean, they tried a couple of times. They tried. Back in as early as 2013, they tried to start raising rates and there was the taper tantrum. They were tapering also the quantitative easing and the market reacted kind of violently. And then again in 2018-2019, they started raising the federal funds rate again and the housing market actually really slowed down. I would argue if we didn’t have the pandemic hit us, the housing market would have entered into a slowdown cycle even basically at 2019-2020 already but then we just had this crazy event happen.
Josh Cantwell: Yeah, exactly. So, we’re probably a little bit more volatile, three years past where we should have been, and a lot more volatility because of COVID exacerbating the problem with affordability, availability, and the cheapness of debt, and obviously the free money that they handed out. So, let’s talk, Daren, as we kind of wrap up for today, home price appreciation. In home price appreciation growing, growing, growing, growing, going crazy from really right after COVID, we realized that everybody wasn’t going to die. It was obviously still a big thing in the summer of 2020 but once people started coming out of their homes and sort of coming away from the lockdowns, then people started getting out and seeing houses but there was a lot less houses to buy, a lot less supply. And so, prices just absolutely skyrocketed in the second half of 2020. And the first, you know, or pretty much most of 2021, they’re still appreciating but at a much slower rate and pace. So, talk to us about that, about what did we see and what do we anticipate things happening going forward.
Daren Blomquist: Yeah. We saw a peak of 24% home price appreciation back in May 2021. And now, we’re down to 8%. So, in August of 2022, and this is according to Attom Data Solutions data. So, we’re seeing that slowdown that is expected given the Fed’s actions. And actually, if you look at that, this is really actually a very encouraging graph. You might think, hey, we’re heading in for a soft landing. The issue is, can you really guide that plane in and not hit the ground hard at this rapid rate of decelerating home price appreciation?
But so far, the Fed’s actions are having, I think, the desired effect on this home price appreciation that was unsustainable. And we’re down to that 8%. I think, on the next slide, then you start looking at, okay, what’s it look at a market level where it actually becomes a little bit more interesting. And this is data from Zillow. They forecast that 12 months at the metro level, and actually, also the zip code level, but this is the metro level. And I would say they’re pretty conservative in their forecast, but they’re forecasting out of 896 metro areas that they look at, 271 are going to see price declines year over year by next year, next September.
And so, that’s basically 30% of the markets. And there’s a map here that we’re looking at, maybe not all of you can see, but there’s red, whereas that represents the metro areas that are going to see a decline. And what sticks out to me is there’s a lot of red on the California coast. There’s actually quite a bit of red in parts of the northeast around…
Josh Cantwell: New York, New Jersey.
Daren Blomquist: Around New York, New Jersey, yep. And then you see some red down in running through kind of the middle of the country as well. Illinois sticks out for sure. And then also, actually, Louisiana as well. And then there’s scattered red throughout other parts of the country as well.
But yeah, I mean, I think if you take the coast of California, New York, New Jersey, and then Illinois, those are three areas that have lost a lot of population. Even the decade before the pandemic, they were losing population, or at least domestic migration-wise, and that accelerated during the pandemic. And so, that ties into the demographic piece. And so, those markets are more susceptible because of the weakening demand in those markets.
I also think some of the so-called Zoom towns, areas where people fled to are a little bit at risk to not necessarily they have the demographics going for them, but they just got out of control because of that kind of gold rush mentality in those markets. We’ve got to buy a property now in places like Boise that Boise sticks out, but there are other markets like that where people are rushing to.
Josh Cantwell: Parts of Nevada, New Mexico, where a lot of people from California fled. It looks like Houston has some red down in very south part of Texas. Again, you have oil drilling is down, oil production is down. You have a White House that’s not an administration, that’s not as kind of pro local oil production, natural gas production.
And then same thing with Louisiana. That’s obviously going to be affected by oil production as well. But the people that fled California, the challenge there is really, in my opinion, you have kind of a two or three-headed monster that will force those values down. One is, in fact, the prices were so high, they were unsustainable. Number two, the cost of interest rates going up is naturally going to force demand down. And three, you have population migration out of California, out of New York, out of Boston, out of Chicago, and out of Louisiana. And people moving to other areas and states that were much more open, COVID-wise, to lockdowns, move people out. So, you have kind of a three-headed monster forcing less demand.
And so, as you see decrease in home values, and again, we’re not talking about decreasing– guys, listen, remember, Daren and I were talking, Daren and I were friends all the way back in 2009, 2010. We had a lot of the same friends. We’re running the same circles. Daren started speaking at my events in 2014. We’re going on now seven or eight years of this kind of pretty, pretty thick business relationship, pretty a lot of fun we’ve had.
But in 2008, 2009, 2010, the overall value of homes in California in some cases had dropped by 35% over about a three-year period. So, don’t freak out to see that there’s going to be some decreasing home values in some of these gateway markets where people left and fled because of COVID and now continue, that there’s continuing to be affordability problems. And when you have higher rising interest rates, that continues to exacerbate the affordability problems.
So, even without COVID, regardless of policy, whether it’s a red or blue area, it doesn’t really matter. When prices get so expensive, people can’t afford to live there, they’re going to move, period, the end. Okay. So, not really surprising there, especially based on the fact that they appreciated so much over the last 10 years or so.
But again, the boom-bust markets are going to be most susceptible to drops, which is typically along the coastlines, and then the Sunbelt areas is going to be most susceptible to drops in the market because people fled, they run there, they have extra cash, disposable cash. They want to buy a second home, a third home, they do it. But guys, remember, this is all about cash flow. That’s why we buy apartments.
So, cash flow, cash flow, cash flow. What I love about this map, Daren, is that the primary areas that I invest in the Midwest and the Southeast is very green, meaning we’re continuing good home price appreciation. It might be at a very much lower rate, but at least they’re going to hold their value, and hopefully, they hold their jobs as well, which means there’s still going to be demand for not only single-family homes, rentals, but also for apartments as well. So, beautiful map there for us to look at.
And so, Daren, I’m curious, nobody has a crystal ball, but if it looks anything like a couple of slides ago, what does this whole thing look like two or three years from now? Like we’re in a recession. There’s more unemployment. Businesses are not growing as fast. We still have a probably more demand than supply in most cases. What are some of the other things we look at that are coming? I mean, we have to talk about this in another podcast, but defaults could add more supply. So, what are some things that we maybe talk about in the next podcast, the next show to talk about how else this could form up two years from now, three years from now?
Daren Blomquist: Yeah, I think the housing market is cyclical. The cycle has been a little bit disrupted and extended probably further than it naturally should have this time. But it’s a cycle. And if you’re prepared for it, I don’t want to gloss over it too much, but it is actually an opportunity and it’s something that you can take advantage of to a certain extent, potentially, as an investor. And especially if you’re an investor for the long term, it’s not going to throw you off the rails.
But that said, I think the opportunity comes with the rise in distress, discounted opportunities potentially during the down cycle, and then an opportunity to see the upside on the back end as the market recovers. So, I think that’s the opportunity we’re leading into. A lot of people have talked about that, anticipated a down cycle even over the last, I would say, five years. Ever since maybe I’ve known you, people have been saying, okay, when is the next one coming? And I’ve never seen it.
It’s pretty clear that it’s coming. I don’t have a crystal ball. Things could change, especially government intervention is the big wild card that could change things. But it’s more clear than it’s been in the last 10 years that I’ve known you, that we are headed into a down cycle. And it doesn’t look like it’s going to be as dramatic of a down cycle as 2008, but that it will mean that you need to adjust some things, but there are going to be some opportunities for benefiting from the down cycle in the real estate market because people are still going to want a place to live. People still want to live indoors. And so, that’s going to carry things through.
Josh Cantwell: No doubt. I had a mentor of mine who over 20 years ago, when I was more in the financial markets before I got into real estate and I was doing financial planning and a lot of mutual funds and life insurance and IRAs and estate planning, he said, look, the market is kind of like walking up a set of stairs while you’re slinging a yo-yo. So, remember when we were kids, Daren, we played with yo-yos.
But yo-yos, for those of you that don’t remember, the little string on it, and you would sling it down and it would hit the bottom and it would snap back up. So, if you’re walking up a set of stairs, that is just an analogy for the long term. The long term is the set of stairs. You’re generally walking up the stairs, and it’s a slow, easy sort of step up, step up, step up while as you go up and down the stairs, you’re slinging a yo-yo. That yo-yo goes up and down more violently, more fastly, up, down, up, down.
But over the long haul, as Daren mentioned, if you’re a long-term investor, you’re still going to be up the stairs 5, 10, 15, 30 years from now. So, that’s really the message here. We’re dealing with the yo-yo at the moment where the market’s going up and down and it seems to be more violent. There are more indicators of a recession, more indicators of higher unemployment, less growth in the real estate market, possibly some more foreclosures coming, and less growth, or maybe even some negative growth in housing prices. That’s the yo-yo just going down.
But the yo-yo has been up for almost 10 years. So, that’s okay. The question is, is now going forward, as some opportunity pops up, there might be some more backlog of foreclosures. You can use the Auction.com platform to be bidding on those types of properties when they do make their way through the foreclosure snake. Those will be listed at places like Auction.com. You can take advantage of those as well with the idea of buying for the long haul.
I bought a lot of apartment buildings lately from guys that are in their 70s and 80s. And trust me, they’ve owned for the long haul and they’re walking away with a significant amount of profit and equity because they own for the long haul. So, I think that’s the message here.
Daren, I’d love to have you come back as soon as possible. We’ll talk about some of the foreclosure activity that’s growing, some of the COVID defaults and redefaults that are happening, and what that might look like down the road as well. So, thanks again for carving out some time for us today on Accelerated Investor.
Daren Blomquist: Good to be here. Thanks, Josh.