BiggerPockets Real Estate Podcast 568: BiggerNews February: Analyst Who Predicted '07 Crash Sees "Yellow Flags" w/ Ivy Zelman
Feb 8, 2022
Ivy Zelman, CEO of Zelman & Associates, is renowned for her accurate predictions, including the 2007 housing crash. In this insightful conversation, she discusses critical trends impacting today’s housing market, including supply chain issues and overbuilding. Zelman highlights alarming 'yellow flags' that potential investors should watch for, suggesting both risks and opportunities. With a broad understanding of market dynamics, she offers valuable advice for navigating the uncertainties of real estate investment.
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2006 Housing Crash Factors
- Ivy Zelman saw many factors contributing to the 2006 housing crash, like unaffordability and speculative land purchases by builders.
- The lack of prudence in lending practices, with exotic mortgages available to unqualified buyers, was another key factor.
Concerns about Market Peak
- Ivy Zelman received calls from C-suite executives asking for advice on buying homes in expensive markets like San Diego.
- This highlights the widespread concern about the frothy housing market and potential peak pricing.
Oversupply Risk vs. Interest Rates
- The current housing market's strength depends more on new construction oversupply than interest rate changes.
- Builders believe in a massive housing deficit, but population and household growth are slowing significantly.
