What about now? Perhaps Real Vision should bring Dr. Jurow back for an update?

Only one or two valid points, most of the stuff he says is useless. He's just selling dooms day bs. visit his website. most of this mess is already worked thru the system. default rates are low because underwriting guidelines are very strict. most of the HELOC's from pre crisis era are all either forgiven, or were part of some debt relief program, or have been refinancing into a low fixed rate. and bottom line, why visit the old bubbles and crisis when their are new ones already brewing everywhere.

This guy is right - home values have been artificially held up because foreclosures are not on market (spoke to realtor about this very thing - empty houses all over the place)- and people who were in foreclosure have been given "restructured loans" which guess what they can't pay? This housing market is going to crash again it is nothing but a shell game. Anyone that can't see the tsunami coming is a willfully blind.

excellent

Painfully verbose ramble about crisis and post crisis well known history. Presented with a conspiratorial tone and judgmental intonation.

Are not Peter Schiff, Jim Rogers, and many more saying the exact same thing about real-estate market?

Thank you for the truth.

Best piece to camera ever

Weird how some negative comments seem to attack the messenger instead of the message.

TOO much Fluff in his comments. Marc Faber 2nd

He mentions speculators at 30%-40% of demand in the 'GoGo' years. Australia-wide is at 50%. Sydney and Melbourne would be higher. Interest only loans over 40% of entire lending market. CBA at 2X book

For Jon L -- That is fair question. My interview intentionally focused only on housing markets. I have written extensively on commercial real estate markets which you can find by going to advisorperspectives.com and searching for my name. You can also view my latest article on the office market at my website -- www.keithjurow.com.

How do these comments about the real estate bubble/mortgage bubble relate to income producing apartment buildings, where we are dealing with rents rather than mortgages?

Exactly what is now happening in Canada. Vancouver is one of the most massive bubbles in the world. Speculative buyers, fraudulant underwriting and lives about to be ruined!

This site continues to amaze me and I'm glad I finally hear someone really telling the tale of the shadow inventory that exists. Imagine if all these homes were on the market. Based on supply and demand, where do you think prices would be? They sure wouldn't be skyrocketing. Again, another sector of the economy is shown to be in a peak debt scenario. These next five years are going to be ugly.

Good comments Tyler B. Agree with your comments. But perhaps the "smart money guys" (PE) have left the building . . . .

I've been a real estate broker in Connecticut for 30 years and this gentleman --is spot on

Good interview. Need more historical detail. What was he recommending 10 years aga? what has change? What do we do other than sell all REITS? Timing is everything!

can we have him back to speak more indepth on this issue?

Very well. But what does the Fed own? What is in these MBS?Why does nobody ask, why does nobody tell ?

Great insights from someone who comes across as honest and well-researched. Thanks a lot for your time!

https://fred.stlouisfed.org/series/DRSFRMACBS to follow up on my earlier post. Here is a Fed chart of home delinquency rates through August, 2016. Clearly in a downtrend. It's seasonally adjusted so you can argue it's manipulated, but it's a consistent long term series of data.....more info on FRED for the taking if you care to do any research for yourself...

Peter -- You're absolutely right though that the IRR and multiples will not be as high for the PE ownership. I think there's a couple things (1) the funds raised around housing were longer-term in duration and not as "opportunistic" in nature in regards to returns (20%+). We've also already seen several of the traditional RE private equity firms go public and get paid (Starwood, CAH; BX has yet to IPO but in pipeline). The purpose of this IPO was to cash out the private equity GP/LPs and pass on to your typical REIT shareholders that don't require 15% to 20%+ returns. This has created a stable REIT sector and is not dependent on opportunistic investors to keep it going. It can still be institutional, but just fall into a different fund such as core or core +

with regard to Todd J.'s comment, the institutional "ownership" of residential real estate is likely to be short to medium term in nature only. This is because, housing doesn't compound at high enough rates to make the IRRs and the multiple metrics (2.5x my money) possible. The private equity / institutional money will have to exit in order to "report" / "generate" the IRR and multiple metrics required to 1) get paid; and 2) raise new money for the next "fund". Todd, could you provide your opinion on this? thanks.

For those of us who do not follow the US housing market closely Dr. Jurow's research and observations are truly shocking, and a potential wake-up call as to what other data the Keynesian policymakers may be manipulating to hide the unpalatable underlying truth.

Clear and Actionable!

Excellent Interview from an excellent and well informed person. When can we get this guy back for 1+ hour Masterclass

I am not able at all to assess the US housing market. Some of you do not agree with Jurow, but none has brought up the rising delinquency rates. Just wondering how you would counter those datapoints? To me the rates seem to be climbing very fast to really high level.

Jurow left out lots of relevant data points here. There are 2 ways I can think off that modified loans can be problems 1) Capital losses at banks and investment funds. 2) upcoming foreclosures depress housing prices. For the former, the obvious question (which Jurow did not address) are how much losses the banks have already provisioned for, and how nonagency RMBS are trading (for example if they're trading at $70 then it doesn’t matter if 30% of nonagency RMBS loans are duds - the market effectively took those losses already) For the latter question - foreclosure's impact on home prices - if NPLs have been outstanding for 7+ years, wouldn’t those houses be so delapidated that they're slated for demolition? In that case they might not even hit the market to depress prices

Agree with Tyler B. Banks write down NPLs so no need to foreclose. They then book a profit when house sells and loan is partially or fully paid. Also, there is night and day difference between some markets and property types. Not sure exactly what actionable items he is recommending. Of course you need to know what you own but all real estate investments are not created equal. Low levered RE in good locations is hard to beat. Appreciate having the topic of real estate discussed on RV.

In general agreement with Tyler, Todd and Jim. I would add that we shouldn't forget the natural incentives the government has for a sustainable housing recovery, and that is property taxes. In cities like Chicago, Cleveland, Detroit and others, higher property values = higher property tax collections, so Uncle Sam has every incentive to keep current housing market strength sustainable.

Completely disagree with Dr. Jurow here. I think Todd and Jim (below) nailed it, so read their commentary. It doesn't seem like Dr. Jurow understands how the system flushed itself of much of the issues through FDIC loss-share programs, NPL portfolios, etc. The can wasn't kicked down the road -- most of the issues were handled as needed at the time (losses were allocated and a new basis was set). Dr. Jurow does not make a strong enough argument on the connection between low home price growth and loans not being able to be modified. Yes, there are still loans from 2005-2007 that are underwater and haven't been worked through, but that won't shock the system. The banks still holding on to these have likely written them down or completely off and can simply sell them at a discount to UPB. The next owner of the loans can then workout the loans through a Deferred Payment Plan, modify the loan, and still make a good return which is what already happened after the crisis and will continue to happen on legacy loans.

is the essence of the speakers argument that a lot of necessary price discovery (foreclosures,etc) was deferred after 2008 due to the magnitude of the problem? Now it's going to bring down the system? Sorry, hard to believe. I need more numbers. Anytime the speaker cites a number it's presented as 'all' of the mortgages, helocs, etc are going to 00.00 at the same time. I have a Lehman no-doc and a HELOC circa 2007. My house in the SE USA is now worth about what it was at the peak in '07. I'll sell it soon but the mortgage is money good for the lender. Arguing a continually smaller pool of loans (due to attrition of death, refi, moving, retirement, foreclosure, etc) is going to trash the US financial system is just too much to believe. And I was one of the people who saw the housing crash coming. Why do you think I got max finance in 2007 in order to lock in cheap finance for 10 years? Family had to live somewhere so I wasn't going to move... Thanks for the alt view but I need more than a 30 minute rant with random facts to run for the hills. I've been to this rodeo before...

Nobody wants to know. You can ignore reality but you can't ignore the consequences of ignoring the reality. John L

Thank you Sam S. for your informative comments. As a home owner, DR Jurow's work is necessary information for me to incorporate into my decision making regarding my personal housing situation.

I agree and disagree with Todd J. In this world of NIRP, dial back on regulations and make home loans easier but without the risky crap, this will provide for returns of 3-4%. We need more homeowners not less. This whole mess is big business, big government and big finance owning everything and everyone. This is America not Europe. Go Freedom!

Interesting to hear the "dire" view at this stage in the RE recovery. Presumably, this person missed all the opportunities associated with the distress (non-agency RMBS, CMBS, NPL pools, direct CRE, multifamily, etc). I'd like to know what this person was publishing in the 2005-2007 period; that would give good context to any current prognostications. Relating the current period for housing to 2007-2009 is missing the nuance. In my view, single-family home sector has changed dramatically. Ownership now has an institutional element that never existed before (i.e. permanent demand thanks to Blackstone, Starwood, etc), over-building has not occurred outside of Class A apartment, and household formation continues to drive incremental demand. Yes, there are issues in the labor force and with wages, yet I would argue that the US single-family home sector is transitioning to a European model = more renters and less owners. This isn't a bad thing it just calls into question the ridiculous notion that everyone has to own a home to be "successful". Sorry NAR, commission compression is coming.

In a normal world I'd believe we should sell everything and run for the hills. In todays CB run, world financial system, I'll just wait for the helocopter money before moving position.

I've been in the RE biz for 37 years and it's very rare to find the "truth", which hurts, mentioned by anyone. Dr. J tells it right and he should be applauded for his courage and conviction to speak the truth. A very close RE banker friend told me directly the government couldn't afford to buy any more foreclosures which is why it stopped. They were paying the banks more money on foreclosures, which was more profit then modifying loans. ING Direct, now Capital One, refused to modify mortgages held directly in house because they were being paid to let them default and foreclose. I had clients directly involved in this crap, where lowering the interest rate to the borrowers on their mortgages would have saved them from defaulting. HELOC loans and 2nd mortgages allow the bankers to get around "non-recourse" state laws on foreclosure, forcing borrower to sign 4-1 riders and these loans follow them forever. WTF

sell everything and run for the hills!