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Two people who lived through the 2008 crash are seeing familiar signals, and they're not staying quiet about it. In this Hot Takes episode, Randall sits down with Baron McWright of McWright Property Management in Jacksonville, Florida, to break down what's different this time, what's eerily similar, and why Baron thinks the real numbers might be scarier than anyone is letting on.
2008 came down to affordability
Baron remembers a lot of strange things happening in financing last time, like dogs getting mortgages. But the bottom line, he says, was affordability. That was the real problem. On top of it, there was a shift in the workplace and a lot of people lost their jobs. This time, he says, we're back to affordability again.
What's different this time
The world lost its mind during COVID, and people made some rash decisions. Baron points to Florida as an example of where that's left things: too much new construction, on every corner in every city.
Builders are squeezing out existing sellers
Builders are offering rates under 5%, paying the buyer's broker, and covering closing costs. Baron asks how an existing seller competes with that when they're carrying a 6.5% interest rate and have no equity. In his view, it still goes back to affordability.
Softening rents are a supply and demand story
Baron sees softening rents as a supply and demand problem, not just a COVID hangover.
The job market adds fuel
AI is making people more efficient, which means companies need fewer people, which means some jobs will be lost. Baron believes that could add fuel to an already fragile market.
Five years of stagnation
In Baron's telling, the last cycle peaked in 2006 and started going down immediately. This time, he says the market has been stagnant for five years. He also says that if you talk to banks, there's an enormous amount of deferments and other items that haven't come due yet, so in his words, nobody is seeing the real numbers.
The views shared in this episode are Baron's own. Whatever the market does next, the right tools and data help you stay ready. See reasons to choose Rentvine, read what others say about Rentvine, or learn about our OpenAPI.
