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The Big Question – Is This a Bubble? | Podcast

In this episode, Sharran and guest Jack Mitchell talk about the big question: Are We in a Bubble? Even before the recession, the market was very fluid…very loose…where anyone could claim an income or earning, and use it to secure financing they either couldn’t understand or couldn’t afford. Today, Sharran and Jack will highlight the differences between today’s market and the market of 2006-2008, as well as the similarities, and determine if we really are sitting on the crest of a wave that’s about to crash.

3 Key Points

  1. Back in the 2000s, getting a line of credit was easier, and you could close on a property in days—that’s not the case anymore.
  2. Remain positive that we’re moving away from a bubble and towards as equilibrium.
  3. Be prepared for longer closure times in the coming years because of the challenges facing lenders and borrowers.

Show Notes

  • 00:42 – Sharran introduces Jack Mitchell
  • 01:03 – Are we in a bubble?
  • 01:23 – There’s scarcity in inventory, and prices are going up
  • 01:55 – There are 4 key points to keep in mind
    • 01:58 – The market now is different than before
    • 02:05 – Credit continues to be easy to access in the 2010s and in the 2000s
    • 02:20 – Construction is pacing the market
    • 02:29 – The equilibrium might be closer than you think
  • 03:53 – Buyers need to afford a home to buy it
  • 04:04 – Because of the crash, buyers now need to prove their income
  • 04:20 – Jack was doing the mortgages during the boom
    • 04:40 – No one has to prove their income back then
  • 05:54 – The days to close is increasing because of the amount of days needed to get a loan
    • 06:18 – Qualifications are tighter now than they were a decade ago, but still far from historical norms
  • 07:25 – Before the loan regulations were not only loose, but applied universally across all banks
    • 07:47 – The loans back then were crazy
    • 08:10 – There was a man who was a department store manager, claimed he was getting $24K income, and was STILL able to finance multiple property acquisitions

 

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Show Notes provided by Mallard Creatives

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