Monday Morning Cup of Coffee takes a look at news coming across HousingWire’s weekend desk, with more coverage to come on larger issues.
At a black tie gala Friday night, expert panelists gathered to give their predictions of the future of the real estate market.
The Norris Group, a California real estate investing company, hosted its 10th annual black tie gala to benefit Make-A-Wish and St. Jude’s Children’s Research Hospital, aka “I survived real estate.”
Click here to read about how much The Norris Group has raised, and what it goes toward.
During a question and answer session, panelists explained their predictions for the year to come, including when they expect the next recession in the U.S. Fannie Mae Chief Economist Doug Duncan predicted the next recession will occur within the next 24 to 36 months. However, John Burns, John Burns Real Estate Consulting CEO explained this recession would not start with real estate, but rather from health care or another market.
While giving their predictions, Duncan made sure to give his three rules of forecasting: If you give a number don’t give a date, if you give a date don’t give a number, and if you get it right don’t look surprised.
The panelists also touched on quantitative un-easing, a topic experts continue to speculate over. Most experts say the Federal Reserve’s announcement to begin its balance sheet normalization, selling off its $4.5 trillion portfolio of bonds, in October will have little effect on mortgage rates. However, some experts disagree, saying it’s good to be prepared for an interest rate spike.
During the session, PropertyRadar Founder and CEO Sean O’Toole predicted, “Quantitative un-easing is going to last months until the next recession, then go back the other way.”
Click here to see a video of the question and answer session of the event.
The name of the event, I Survived Real Estate, took on a whole new meaning for me as, Friday afternoon, two earthquakes shook parts of both Northern and Southern California.
The earthquake outside of Los Angeles, where the gala took place, was small measuring just 2.9 on the Richter scale, and 5.7 off the coast of Northern California. But being the native Texan that I am, where I wouldn’t know an earthquake if I were standing in the middle of one, I would be lying if I said there weren’t a few knots in my stomach when I saw the words “preliminary 5.7 earthquake” flash across my screen.
Preliminary? What did that mean? Could there be more? Would they be bigger or smaller? I’M FROM TEXAS! We don’t have earthquakes.
After getting back to Dallas and doing some research, it appears that small earthquakes are very common, however experts are increasingly predicting a stronger, possibly up to 8.2-magnitude earthquake, could be just off the horizon.
An earthquake of this magnitude could rupture the San Andreas fault from the Salton Sea, close to the Mexican board, up to Monterey County, and would include areas such as Los Angeles, Riverside and San Bernardino, according to an article by Rong-Gong Lin II for the Los Angeles Times.
From the article:
A magnitude 8.2 earthquake on the San Andreas would produce shaking more intense than either the Mexico or Northridge earthquakes.
It would bring intensity level 10 shaking, which is perceived by humans as “extreme.” Such shaking would blanket huge swaths of Southern California — an earthquake that no one alive today has experienced in this region.
The article explained an earthquake of this magnitude could bring a death toll of nearly 1,800, making it one of the worst natural disasters in U.S. history.
From the article:
More than 900 could die from fire; more than 400 from the collapse of vulnerable steel-frame buildings; more than 250 from other building damage; and more than 150 from transportation accidents, such as car crashes due to stoplights being out or broken bridges.
The scenario produced by the U.S. Geological Survey predicted between 500,000 to 1 million people would be displaced from their homes. The region’s hot housing market would collapse.
But earthquake risk, and reports of the damage it could cause is nothing new to the real estate market.
Friday afternoon, the U.S. Department of Housing and Urban Development Secretary Ben Carson broke with President Donald Trump to back Roy Moore in Alabama’s Senate race.
Moore, former chief justice of the Alabama Supreme Court, is running against Sen. Luther Strange for the GOP seat. The president traveled to Alabama Friday to announce his support for Strange, and touch on…other topics.
But Carson split with the president on this decision, backing Moore, according to an article by Joe Light for Bloomberg.
From the article:
“Judge Moore is a fine man of proven character and integrity, who I have come to respect over the years,” Carson said in a statement released by Moore’s campaign on Friday. “He is truly someone who reflects the Judeo-Christian values that were so important to the establishment of our country. It is these values that we must return to in order to make America great again.”
Carson referred to himself as Dr. Ben Carson in his release, and did not use his government title.
Have a great week! The best day is yet to come as the Dallas Cowboys play on Monday night this week!