Housing On the Knife’s Edge

Published on
October 1st, 2020
Duration
61 minutes

Hitting “Fast Forward”: The Escalation of Major Trend Shifts – Live with Michael Oliver


Housing On the Knife’s Edge

Live ·
Featuring Keith Jurow

Published on: October 1st, 2020 • Duration: 61 minutes

Keith Jurow, columnist at MarketWatch, returns to Real Vision to provide a strategic update on the precarious state of the U.S. housing market. Jurow shares with Real Vision's Jack Farley his analysis on how the black-swan of COVID-19 is squeezing the U.S. housing market from all sides and threatens to burst the housing and mortgage bubble. Incorporating data such as existing home sales, record low mortgage rates, as well as delinquency rates not seen since the 2008 financial crisis, Jurow interprets the rising risks in the housing market and explores the likelihood of an extreme correction. For the August TCW report, click here: https://rvtv.io/34jKLt8. For Redfin data on housing sales and prices, click here: https://www.redfin.com/blog/housing-market-news-august-2020/. For Keith Jurow's additional charts, click here: https://rvtv.io/3jdEo0x.

Comments

Transcript

  • TB
    Tyler B.
    8 October 2020 @ 04:34
    I thought it was a good interview but generally disagree with a lot of the key takeaways. The moratorium on FHA Loans foreclosure and eviction completely skews the delinquencies data. I agree that pricing will take a hit once the moratorium ceases, albeit briefly. However, I find Logan Mohtashami’s perspective — which is that the next 5 years are completely bullish for housing giving interest rates and demographics— to be more persuasive especially given the dichotomy of who COVID has impacted. I also don’t understand the concept of an ELEVEN YEAR ILLUSION....maybe I just disagree with word choice of illusion. If I had more time I’d rephrase this but If you think the entire market is wrong for 11 years, then I think that just means you are wrong for 11 years... an entire industry (SFR) with billions and billions of dollars backing it was built on this so-called recovery for the last 11 years. Invest on the right side of history. Happy hunting.
    • KJ
      Keith J. | Contributor
      8 October 2020 @ 15:28
      Tyler, Unlike Logan, I do not have a crystal ball. As for why I call the so-called recovery an illusion, I suggest taking a good look at several of my MarketWatch columns written over the past two years where I explain the 3-pronged strategy of the servicers in depth. You can search my name on the MarketWatch homepage and then hit "Advanced search."
  • lf
    liam f.
    7 October 2020 @ 01:34
    The interviewee, Keith was great. I work in real estate, the eternally optimistic market (maybe delusional) and I think he is bang on.
    • KJ
      Keith J. | Contributor
      7 October 2020 @ 15:40
      Thanks very much, Liam.
  • lf
    liam f.
    7 October 2020 @ 01:46
    The increase in the risk premium is a standard way to defend commercial property values which won't seem to decline... or not near to the extent that would be expected. The risk free rate has nowhere to go but up from here and with the probable volatility to come, that risk premium is not about to shrink. Just a good synopsis of why real estate lags the economy.
  • TE
    Tito E.
    6 October 2020 @ 08:08
    Great interview Keith. Do you look at real estate for any other countries? I'm in the UK, feel its a v similar situation here.
    • KJ
      Keith J. | Contributor
      6 October 2020 @ 13:55
      Tito, The US real estate market is enormous, confusing and complicated. Unfortunately, it occupies all my attention. My suggestion is that this is a time to be cautious about real estate anywhere.
  • NH
    Nathan H.
    4 October 2020 @ 17:53
    Wow this is some great insight into the US housing market and all the manipulation that goes on with the real estate board. I was just wondering if Keith or anyone on here could recommend a good housing analyst or site for Canadian housing. I'm pretty sure our real estate board is much worse when it comes to data manipulation and I've yet to find anybody actually reporting the truth on this subject.
    • KJ
      Keith J. | Contributor
      5 October 2020 @ 02:58
      Sorry, Nathan. I have my hands full with the US housing markets and can't really provide any Canadian analyst.
    • SS
      Steven S.
      5 October 2020 @ 22:37
      Ross Kay is verbose but has some good info. https://www.youtube.com/watch?v=oVSPK2VzenQ
  • JL
    John L.
    3 October 2020 @ 17:46
    Connecticut sales up big, but does it indicate an exodus? A sale is a buyer and seller
    • KJ
      Keith J. | Contributor
      5 October 2020 @ 03:03
      John, It's not just sales up 40% year-over-year. Prices are up nearly everywhere in Fairfield County as well. The housing markets in the county have been stagnant for several years. There is just overwhelming evidence that most of the buyers are coming out of NYC.
  • MB
    Michael B.
    5 October 2020 @ 00:47
    Curious what Keith thinks about the threat of increasing property taxes offsetting the benefits of lower mortgage rates? Low rates encourage overpaying which leads to higher prices and in turn higher property taxes. If Rates go back up, the next group of buyers will only be able to afford to pay less and we all know, property taxes never go down.
    • KJ
      Keith J. | Contributor
      5 October 2020 @ 03:00
      Michael, I really don't think that property taxes has much influence on home prices. that is why I focus on the factors which I discussed in this interview.
  • DB
    Daniel B.
    4 October 2020 @ 15:50
    What will be the impact on the housing market when the 25 trillion of stranded assets in the treasury market tries to find a home?
  • AB
    Alastair B.
    1 October 2020 @ 10:19
    Are they in the same room?
    • EH
      Edward H. | Real Vision
      1 October 2020 @ 12:44
      Yes! My understanding is Keith had such bad internet that we couldn’t book him for weeks. So we had him come in to the studio to tape from there
    • JF
      Jack F. | Real Vision
      1 October 2020 @ 13:05
      We were in the same building. As Ed mentioned, Keith came into our NYC offices for the interview. Keith was in our studio, on the second floor, and I was in the office on the 11th floor. I think it's the same brick wall behind us
    • EK
      Eric K.
      3 October 2020 @ 19:09
      Now THAT's social distancing!
  • MS
    Mike S.
    2 October 2020 @ 22:32
    Great interview. Well done Jack. More of these types of realists SVP!
  • BE
    Benjamin E.
    2 October 2020 @ 16:46
    Fantastic Interview. I would love these 2 to be a serial team for monitoring the housing market. Their collaboration is that good.
    • KJ
      Keith J. | Contributor
      2 October 2020 @ 20:34
      Thank you kindly for this.
  • DS
    David S.
    2 October 2020 @ 20:19
    What a fantastic interview! Thanks Keith and Jack. A great peek behind the curtain to reveal what a sh*t show sham the RE market is. There were a lot of unknown unknowns for me. Please come back soon.
    • KJ
      Keith J. | Contributor
      2 October 2020 @ 20:32
      Thanks David for those kind words.
  • DM
    Dominic M.
    2 October 2020 @ 17:43
    Keith Jurow is the single best commentator on the US housing market IMO. Thanks for having him on, and please have him on again soon!
  • CM
    Christopher M.
    1 October 2020 @ 17:35
    Great interview. FYI, Taleb, who coined the term "black swan," has repeatedly insisted in every public appearance that COVID-19 was a predictable white swan, not a black swan.
    • JF
      Jack F. | Real Vision
      1 October 2020 @ 19:16
      Thanks Christopher. Yes I've seen Taleb say that. I don't happen to agree. I think financial crises are very very hard to predict, but more predictable than a pandemic
    • DS
      David S.
      1 October 2020 @ 22:35
      Mr. Farley - For me, the real difference is that we can recognize that a white swan is a crisis in the making. RV spends a great deal of time identifying white swans. Where I agree with you 100% is in the prediction. When/how will the pension fund problem explode? It is already identified as a white swan to be watched. I feel that 9/11 was a black swan as it was so far off the radar. It may be that Mr. Taleb would disagree with me also. It is a fine point. A seasoned trader may not even care. He/she is just trying to trade the market as it happens regardless of what swans are flying. DLS
    • JF
      Jack F. | Real Vision
      2 October 2020 @ 00:46
      DLS I 100% agree. We are looking for swans - their color matters only in that others can or cannot see them. I chose the phrase "black swan" because it is the much more well-known phrase
    • DS
      David S.
      2 October 2020 @ 06:38
      Jack F. - Thanks. Your choice is just as good. In addition, more people may understand which is the real point. DLS
  • JB
    Jack B.
    2 October 2020 @ 00:13
    Genuine is the word that I land on that describes Mr. Jurow, and his narrative based on the data he discovers. A great example for everyone to follow.
    • JF
      Jack F. | Real Vision
      2 October 2020 @ 00:48
      Could not agree more
    • KJ
      Keith J. | Contributor
      2 October 2020 @ 02:32
      Much appreciated, Jack
  • mw
    michael w.
    2 October 2020 @ 01:58
    Just like other markets, the problems from 2008 were never fixed. Papered over with debt. Some people now assume it is normal to be levered to the gills in real estate. When he talks about the servicers vs banks who deal with these mortgages, it sounds just like the Eurodollar market. No one knows how bad it really is until it falls apart.
  • DP
    Duane P.
    2 October 2020 @ 01:05
    This was a good interview and I appreciate Keith's analysis but I think it is important to know that this guy is basically a perma-bear on housing and has been wrong on its direction for a decade.
  • DS
    David S.
    1 October 2020 @ 22:12
    Excellent presentation. Thanks Mr. Jurow and Mr. Farley. Professionally researched by both. I think the Fed does know but cannot tell that it has no idea how to get out of this either. Most of these problems are white swans – can be expected to happen. We know that pandemics will happen once in a while – a white swan. Most people believe we are at the end of a super credit cycle – a white swan. IMO the real black swan like 9/11 will be when everything is correcting at the same time. The cascading effect of the debt problems, the pandemic problems, the rent deferment problems, the mortgage deferment problem, pension funding problem, the global supply chain problem, the Euro/US dollar problems, the bank problems, ad nauseum will implode together causing a real black swan. I need to hold on tightly and see if I am correct over the next few months. I am too old to see how all this will work out well. All my strikers are on the bench - cash. Even my goal keepers were reduced this morning. DLS
    • JF
      Jack F. | Real Vision
      2 October 2020 @ 00:47
      Thank you, David!!
  • MS
    Martin S.
    1 October 2020 @ 17:11
    Great interview Jack, really enjoyed it, very insightful.
    • JF
      Jack F. | Real Vision
      2 October 2020 @ 00:46
      Thanks, Martin!
  • FC
    Frank C.
    1 October 2020 @ 21:08
    Great interview! This really makes me wonder how big the reverse mortgage market will be over the next decade.
  • DB
    Donna B.
    1 October 2020 @ 12:56
    Nice job Jack. I learned a lot from this interview. Thank you.
    • JF
      Jack F. | Real Vision
      1 October 2020 @ 14:33
      Thanks Donna! I'm glad to hear it. Keith sure knows his stuff
    • KJ
      Keith J. | Contributor
      1 October 2020 @ 17:12
      Terrific, Donna. I think a lot about the audience and what would be important to them. Hope I didn't get too much into the weeds.
  • CG
    Chad G.
    1 October 2020 @ 16:56
    Keith is a stud!!
    • KJ
      Keith J. | Contributor
      1 October 2020 @ 17:11
      Thanks for the kind words, Chad. Much appreciated.
  • PU
    Peter U.
    1 October 2020 @ 16:38
    Very nice job Jack. You are coming along nicely!
  • EH
    Edward H. | Real Vision
    1 October 2020 @ 12:43
    This is the first time I have seen Jack Farley on the plus tier. I want to give him a shout out on a job well done.
    • JF
      Jack F. | Real Vision
      1 October 2020 @ 14:12
      Thank you, Ed!