BiggerPockets Real Estate Podcast

J Scott: We’re Due for a Recession, But It Isn’t All Bad for Real Estate

Jan 10, 2025

Join real estate expert J Scott, an investor and author experienced in navigating market ups and downs, as he predicts a looming recession. He discusses the implications of potential Trump policies on inflation and mortgage rates, arguing that now could still be a prime time to invest. Scott delves into the two-sided nature of economic cycles, highlighting the challenges of rising rates while providing insightful strategies for future real estate investments. With over 500 flipped homes under his belt, his insights are invaluable for investors aiming to thrive amidst uncertainty.

42:08

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Episode guests

J Scott

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Quick takeaways

Mortgage rates will likely remain high due to inflation concerns, impacting housing affordability and slowing down transaction volumes.

Investing in real estate, even amid recession fears, is still considered a viable strategy for long-term wealth accumulation and inflation hedging.

Deep dives

Mortgage Rates and Their Influences

Mortgage rates are heavily influenced by inflation expectations and the performance of the 10-year Treasury bond. While the Federal Reserve has recently lowered interest rates, this has not led to a decrease in mortgage rates; in fact, they have risen above 7% once again. This increase is attributed to investor fears regarding inflation reemerging, despite prior progress in reducing it. The expectation is that if inflation outlooks improve, mortgage rates may decrease, but as of now, concerns continue to drive rates upward.

Intro

2min

Mortgage Rates and Economic Influences

10min

Navigating Real Estate Uncertainty

7min

Navigating the Real Estate Landscape

6min

Navigating the Unpredictable Housing Market Landscape

2min

The Dual Nature of Economic Cycles and Debt Dynamics

3min

Navigating Economic Uncertainties and Investment Opportunities

5min

Navigating Economic Uncertainty

8min

Will mortgage rates remain above seven percent in 2025? Are we closer to a recession than most Americans realize? Why does it feel like this economic cycle of high rates and a struggling middle class will never end? The biggest question is: What do all these factors mean for real estate, and should you still be investing? We brought on the man who literally wrote the book on Recession-Proof Real Estate Investing to give his 2025 outlook.

J Scott has flipped over 500 homes, manages and owns thousands of rental units, and has been involved in tens of millions of dollars in real estate transactions. He started investing in 2008; he’s seen the worst of recessions and the highest of pricing peaks. We brought him back on the show as our industry expert to provide his time-tested take on what could happen in 2025 and share his economic framework for forecasting what’s coming next.

J says we’re long overdue for a recession—and the red flags are popping up more frequently. While signs of a global recession loom, J explains what this means for mortgage rates and home prices and why now might still be the time to invest.

In This Episode We Cover:

Why J believes we’re closer to a global recession than most people think

New Trump presidential policies that could have huge impacts on inflation (and mortgage rates)

Whether mortgage rates will stay in the seven percent range EVEN as the Fed lowers rates

The broken economic “cycle” we find ourselves in and the only way to fix it

Could home prices correct/crash if mortgage rates finally do fall?

And So Much More!

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