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Billionaire real estate developer: Housing industry getting hit by ‘perfect storm’ - YouTube
Channel: Fox Business
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loom on all of that the billionaire real
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estate developer battleborn investments
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uh
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acquire basketball teams maybe for las
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vegas i could go on and on uh
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jay very good to have you how do you see
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housing i mean foreclosure activity is
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still a tiny percentage of the overall
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housing market right now you hope it
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stays that way but generally the tougher
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times get uh normally the more those
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numbers rise are you worried about that
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yeah we're in the middle of a a real
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estate boom like we haven't seen in in
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the past and a lot of it has to do with
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several different factors you have uh
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supply chain interruption
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uh where you know a 12 piece of lumber
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is now 80 or 80 to 100
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you have low interest rates and you have
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a foreclosure moratorium that's pandemic
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related so you have a perfect storm of
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of uh
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of factors that have come together to
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create this artificial shortage and now
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we're starting to see interest rates go
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up fast we're seeing the foreclosure
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moratorium start to lift and and you're
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seeing the supply chain start to get
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fixed and when that happens that
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artificial
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uh that artificial shortage in our
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housing market uh inventory goes away
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and and the result is you're going to
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have
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more new home starts which is going to
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bring put downward pressure on pricing
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you know um for now i i always look at
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this as a pretty good proxy on how the
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the the real players in the real estate
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industry feel when the builder
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confidence is dropping or at least their
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commitment uh
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to to build
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in the future more homes or even make
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the the step in that direction with
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permits and the rest does that tell you
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that they're girding for something
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well i think you're seeing builder
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confidence drop because you have again
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this supply chain interruption it's hard
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to get materials the materials you get
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are extremely expensive relative to what
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they historically cost so your economics
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change dramatically and then it's it's
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difficult to find labor you can't find
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plumbers and electricians and hvac
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service people so building a home has
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gotten extremely expensive
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and as a result builders are building
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fewer homes and what's happening is
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that's pushing up the value of the
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existing home inventory which inventory
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itself has been
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uh you know artificially
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uh because of the foreclosure moratorium
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so you have kind of this perfect storm
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of elements that have just created this
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runaway market but i don't i don't see
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how it's sustainable so what happens is
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it akin to sort of the frothiness we saw
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in the housing meltdown ahead of the
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financial meltdown
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uh
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you know in the last real estate bubble
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whatever you want to call it people were
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buying properties on scene flipping them
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uh
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you know without ever having visited
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them and making a lot of money and it
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got a little crazy are we going to get
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crazy here
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i think so
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i remember in 2007 when builders would
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have
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uh lotteries to buy a house from them
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and there were lines and people would
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camp out overnight wow so i mean we
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potentially could get back to 2007 2008
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situation
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so what about the hot markets like vegas
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i'm sorry but what about the hot markets
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like vegas and what's going on in
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florida and everything else i mean is
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that sustainable or will the momentum
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slow or will it be an outright reversal
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i i just i i think the momentum is going
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to slow and i and i think there's going
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to be an outright reversal i just you
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know again housing affordability is an
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issue you have rents that are going up
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because the property values are going up
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to the point where it's unsustainable
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people can't afford housing
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um
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it's it's not deterred your
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you know aggressive posture you've got a
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great deal of success doing what you're
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doing and the real estate world and
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zigging while others zag i get that
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but now to the point of looking at an
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expansion team bringing the basketball
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team to
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to las vegas i mean is this the
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environment to to even consider
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something like that
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that's a much longer term vision
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right so markets are cyclical and and i
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think we're heading towards a downturn
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but i tend to be a contrarian for the
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most part so while everybody's buying
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i'm selling and when everyone's selling
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i'm buying right so right now i think
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there's a long lead time if a basketball
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team even comes to las vegas it's going
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to be years from now
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and we'll go through the cycle and we'll
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be on an upturn again
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well las vegas got a hockey team that
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that removed any doubt that the city has
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some hutzpah but i mean how likely is it
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i mean say it's it could be years away
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there's a lot to go through for that
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right
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there certainly is there's some very
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qualified people that are looking at uh
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buying an expansion franchise and the
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nba hasn't even announced that they're
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gonna do it right so
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um there's rumors there's supposition
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um you know i'm hoping they do it i
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think it would be great for the city i
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think the city having a team here would
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be great for the nba um but you know
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it's all in the hands of the board of
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governors and and the nba commissioner
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we'll keep us posted on that j bloom uh
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following all of that expansion teams
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looking at the reality of the real
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estate industry that the good times
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might not last for a while
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how far down we go from here anyone's
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guess
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