It seems like too much of Logan's points are black and white thinking. "Housing is going up, the crash bears are wrong." What if housing is flat to negative yoy for 3-4 years with an overall decline of 15-25%? How about a decade of nominal price increases not keeping pace of inflation? These are not crashes but are things that happened multiple time throughout history and could easily happen again. Seems like he is much more focused on transaction volume than price. I live in socal as well and it is not as rosy as it is presented. True the prices have not changed much at the lower end of the range, townhomes have been particularly strong, but the upper end of the market is down and may have even peaked pre-covid. I work on the commercial side, so I don't have a good awareness of who the typical buyer is right now but it has puzzled me for the last 3 year how the actual millennial couple is buying anything in the CA market. Sure, there's family help and buyers with equity built from 2010-2014 but besides that? Personally, I don't know a single home owner under 34 that simply went out and bought a single family house in Orange County with a 5-10% down payment and no external help. I have a hard time understanding how this trend simply continues in a recession.

Logan Mohtashami has been correct YTD. Guy knows what he is talking about.

Compared ot markets I have been overly pessimistic, and he believe he has a point - people that have a job, they buy what they can afford in the moment, and given zero-rates, they can afford a lot... I, as many Real-Vision viewers I guess, are more perma-bears that struggle understanding how all of the credit-based economy continues to function

Mr. Mohtashami is exuberant and full of charisma. I'm sure it helps his business deals, but I couldn't help but think of the real estate broker in "The Big Short" where she says "Oh, its just a gully in prices..." in a half-hopeful tone. I agree that people move from urban areas to suburbs regularly due to different stages and needs in their lives, but he conveniently danced around the fact that this time, the hollowing-out of cities is happening in many markets. I'd suggest he take a look at UHaul rental rates - to escape an urban center they are disproportionately higher than ingress -- and that number is much higher than "normal" cycles of outflow. The "Detroitification" of many cities is ongoing. Their local economies are shut down, and in instances where they are open, its at a fraction of normal volume. In tourist-heavy cities like DC, hotel occupancy is hovering around 10%, when it is usually much higher. Combine this trend with second-order effects of an eroding tax base, both citizens and businesses, and you have a slow-motion implosion wave that hasn't even hit the shore. Deferred rents are expiring, and even with the Fannie Mae and Freddie Mac extension through December of this year for foreclosure, you're looking at pent-up disaster ready to strike. I take great umbrage at Mr. M's assertion that "Well, they qualified for those loans, so they can take care of it". It belies a rather simplistic view of the employment landscape (massive temp furloughs turn into permanently laid off workers) and the simple equation of demand fleeing the urban centers, so certain job sectors are hit -- hard. We're starting to even see the white collar jobs get hit after the massive bloodletting in the service/hospitality industry. If they don't have income, they're not going to make good on their loan. Without forbearance, they'll not bother to stay. If a homeowner had the choice, they'd take whatever remaining equity in the house -- try to re-fi to get the cash, and then flee to the least expensive area -- or buy an RV and try to rough it out. (Coincidentally the RV industry has been BOOMING, proving out this theory) This is the "Great Migration". It isn't temporary, it isn't just people getting sick of small apartments, its a fundamental shift in where people live, and why. The economy is not a light switch. Its more like a big, heavy dynamo. It takes a lot of effort to get it going again, and the second-order effects of this will make that more apparent.

« [...] think about all the workers who still work [...] » It is true that we often hear about the ones who lost their jobs.

Real estate is a good inflation hedge. Leave sf buy home in suburb makes sense. 1 bedroom in sf is 5k to rent.

Logan is a serious breath of optimism for the US housing market. Thanks RV for bringing me up to speed on the exciting and reassuring truth about the property market!

Finally a view that contradicts the core RV thesis! Pls continue to invite people with different views and try to eliminate confirmation bias.

This guy's opinion is that of every person working in the real estate industry. The confidence machine is hard at work. I don't think it is real estate Armageddon but to imagine the long standing relationship between unemployment and house prices is not going to hold is ridiculous. Say the impact is even half of what the usual relationship is due to the low income nature of people hit the hardest by the fallout of the pandemic. Based on the total sustained unemployment number for this year, that is still pretty bad.

I've lived in South OC my entire life. This guy is clearly an "Irvinite." I'm not savvy enough to clap-back with a technical analysis, but it's definitely not all rainbows here in California for both renters and owners. Will be interesting to see if his thesis plays out...

Look at this constructively. I like the story but not the interview. This is a disappointing interview…Although it opened up an interesting alternative discussion point, It raised more questions that could have been clarified during the interview. It could have tied up loose ends with the rest of the macro story from RV. The interview lacked prep research and the audience wants to relate to the bear case RV has been promoting by really owning it. The “Let me make the bear case” statements exemplify this. Ash missed an opportunity to synthesize this with other stories to test the rigour of Mohtashami’s thesis. e.g. Peter Van Metre suggests on RV and shows FED data on some of his podcasts that mortgage approvals are going down for both the commercial and residential real estate. Maybe Mohtashami’s has better data sets from banks. Would be nice to understand that. Some pre-interview prep could have drawn out some supporting data. For example, when Mohtashami came up with a counter-story to the COVID causing a shift to housing he countered with demographics narrative, not facts. It's best not to allow the interviewee to counter a key narrative with another narrative without graphs or convincing quantitative figures to support the counter-argument. Plus this 2020-2024 positive housing demographic goes against the RV thesis. Harry Dent and Raoul Pal have strongly been arguing the demographic cliff negatively affecting the housing market as of this year. “Dyers aren’t buyers”, is a contradictory thesis so how do we synthesize these two stories. We need comparative data. The housing story is an important cog in the macro story yet seems a poorly understood part of the puzzle which appears to be a blind spot in the real vision narrative. This is probably because it tends to be the last sector to fall over. But is that narrative itself a blind spot? We are at an inflection point and the housing market supports the middle-income economy that everyone needs not to collapse. If you want an idea on what type of prep for this kind material looks like it helps to look at some of Martin North’s detailed housing survey research, real estate, government policy and financial sector videos for Australia. He would actually question Mohtashami’s thesis in a deeply insightful way to draw out the supporting data or not. There is so much more that could be unpacked in the housing story like the price of lumber and copper going up and why. There is no mention of a big missing discussion piece (can I draw an elephant emoji here?) which is the end game. For example, the government supporting forbearance and how that could manifest in the financial sector into a credit squeeze? The government paying for the problem doesn’t make it go away forever, it just moves it somewhere else in the economy. (But then we didn't get any graphs on forbearance either as it was not an issue.) Just provoking some thought or other episodes.

Great job by Ash keeping the topic outline crisp!

I think for those of us who remember that housing bust of 2008 it was easy to be wary of housing tanking again, but historically housing rarely does that. I think 2008 was really a unique event and that many of us will never see again and housing might just keep rising.

Interesting case on housing. I had my doubts it would drop significantly because that would take forced sales, and the government would work with the banks to stem the tide again. That being said, its interesting to hear that this trend could have 2-4 years to go. Doesn't affect me I guess, I doubt I'll ever own a home, but I'll be wary of calls for a top in homebuilders.

Excellent interview. I agree with Mr. Mohtashami on the home ownership market, although I am never quite so positive. Even mortgage deferrals can be handled by adding payments to the end of the mortgage. Selling, downsizing, and lower prices will take care of reduced income problems. The high-end market in the major cities like New York may take a bath, but most of them can probably afford it. In addition, Uncle Sam, who cannot afford it, will take some of the pain in lower taxes. An investment in the home is one of the few places people can use leverage to their advantage. Home ownership will continue to work as long as people have jobs. More importantly, I would like to see one or two in depth interviews on commercial and residential rental markets. I do not see any light at the end of that tunnel. This will be a major hit to the GDP and tax collections. DLS

Yeah it’s all sunshine and rainbows! Is this guy out of his mind?

I understand his view and I understand also the critics in the commentaries. That's short term forecast. Real estate moves with demography and interest rates. Ultimately the unfolding is going to be when rates will go up.

Lumber is up ~300%. Housing bull market or death of cities?

This is disappointing in so many ways.

Logan, excellent insight into the housing market. How about investment properties like multi family? Based on your thesis, that might struggle as those are renters & they will struggle until unemployment goes down right?

He fails to mention remittances in mortgages have been steadily declining MoM by those on forbearance and 60-90 days and 90 day + delinquencies continue to increase. 120 Fannie and Non-QM data from WFc, JPm and BAML all say the same thing. Black Knights open source data is stuck at 4mm+ in forbearance. The Non-QM sector is in mid-teens delinquencies, HUD 769k+ loans are in the teens-20% range

Wow!!

Hindsight is 20/20. I think because lot of people got stuck at home for so long, many decided to pull the trigger on housing upgrades or new purchases. Lot of disposable income going to travel and leisure went into housing. I can’t argue with results but don’t understand the argument that when it comes to mortgage rates the margins buyer matters but when it comes to unemployment marginal buyers are irrelevant.

He says he is data and model driven but providing hypothetical scenarios on forbearance, can he disclose data he is using? Is it MBS loan level data? Is he looking at that data?

Marked! Let's see 6 months to 1 year later.

Although he disparages politics, it seems that (like most of us) his thesis is strongly driven by his political views and the underlying assumptions that inform them.

So long term lockdowns can do a systematic crash in housing. In Melbourne Australia we are in a total lockdown again. Is the Melbourne/Victoria housing about to crash or will it follow US housing, and see a new high? RBA is expecting up to 40% crash that Seems like doom case scenario.

Mohtashami, any thoughts on Canadian housing market?