A ‘Big Short’ investor sees financial disaster brewing in housing markets — again
CNBC International 
A ‘Big Short’ investor fears an often-overlooked climate risk could see history repeating itself in the housing market.
Dave Burt, CEO of investment research firm DeltaTerra Capital, was one of the few skeptics who recognized the real estate sector was teetering on the brink of collapse in 2007.
He helped two of the protagonists of Michael Lewis’ bestselling book “The Big Short” bet against the mortgage market in the lead-up to the 2008 economic collapse. As it turned out, they were right and made millions.
Now, Burt believes the mortgage market is underestimating another systemic issue: flood risk. If realized, he warns the fallout could resemble the massive correction seen during the global financial crisis.
“Ultimately, until people have good information about what these climate-related costs are going to look like, we’re creating new problems every day. I think that’s really the crux of the matter,” Burt told CNBC.
So, why does the U.S. housing market seem to be underestimating the cost of flooding? What does this mean for homeowners and homebuyers in the U.K. and around the world? And what can be done to mitigate this risk?
Watch the video above to find out.
#CNBC #Property #HousingMarket #Floods #ClimateChange #Sustainability
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About The Author
I had a fortuitous dream several years ago that a waterfront home I once owned had water flooding the main level floor – it wasn't from Puget Sound — it was rain water. We'll see 🤓
I believe that this video will be proven correct, on many levels. How soon? Best guess is within 10 years. The fact that FLOOD ZONE properties are County and State permitted to be rebuilt is pure STUPIDITY.
We absolutely not "all linked by the global economy". This is ridiculous. America is it's own economy.
I have no sympathy for these Corporations that bought up huge numbers of houses hoping to turn a huge profit on them. The ridiculous thing is the home I bought (after down sizing from another home) 7 years ago has tripled in value. Of course if I sold I would have to buy in this same out of control market or move hundreds of miles from the city.
Hmmm, an NBC product, pushing a climate agenda. weird.
Yup! Believable! Always kicking the can down the road! Let's see if Scamerica has changed or if they'll bail out the rich with Corporate Socialism again
Hmm, as people ditch their exposed properties in the US, would that not just exacerbate the housing shortage in other places?
You worry about you and don't do anything stupid and you'll be just fine.
The US economy is grappling with uncertainties, global fluctuations, and pandemic aftermath, causing instability. Rising inflation, sluggish growth, and trade disruptions need urgent attention from all sectors to restore stability and stimulate growth.
Mortgage rates are currently at an all time high since 2000(23 years) and based on statistics on inflation, we might see that number skyrocket further, a 30-year fixed rate was only 5% this time last year, so do I just keep waiting for a housing crash before buying or redirect my focus to the equity market
Hasn't this guy been predicting another crisis about every 3 months since the last one ended? Why are we still listening to this guy because he was right one time?
so environmentalist, climate activists and researchers have been talking about this for at least a decade but you choose to interview this guy?
How did you all at CNBC talk about these hazards to homes without ONCE addressing the fact that development in areas that are highly prone to environmental hazards continue to be built rapidly and without any consideration of the risks present? Most of the disaster damages in this country are in places that were hazard prone long before climate change measurably amplified the hazardous conditions. Deeply irresponsible climate-washed reporting in this story. If there was a license for journalism, yours would be revoked for spreading misinformation and ignorance. F-. 👎👎
What's new. Extreme value statistics experts like myself who have literally studied terabytes of data, saw this coming years ago. Now that guy comes and sells what scientists said long before him as new. If someone was interested, I have actually calculated the risk and true cost for the US East Coast.
Or use flood prone areas as green belts natural reserves and parks. The states of Washington Idaho and Oregon do this and rarely does it flood bad enough to reach private property
Нет слов, просто потрясающе
The big short is climate change 😉 nice con!
Please tell me this is satire.
So the solution is check flood maps and fortify your property? Lolol. Who can afford to do that. This is all gonna turn out great
ALL WRONG: would you buy property in an undeveloped plot of land with no access to plumbing, infrastructure, or electricity??? Of course NOT. So this means that the govt only choice is to bar citizens from building on floodlands. The govt can't be responsible for everything. The first settlers never expected help from any "government" funding. They can not help. Won't help. can't be expected to save your ass. You can only calculate your risk and buy insurance. If not, don't buy near wetlands. No duh. If you do, then your property value should be estimated at only a few dollars. Like equivalent to the cost of your furniture
When I was a kid in the 1970's I was told that Cape Cod would not be existence when I was a grown adult, which made me really sad & ruined my childhood vacation. I wonder if that person is still alive to tell me whether Cape Cod is still there.
Clickbate Detected. Nuclear fallout is more real than global flooding, by the way, both disasters only reduce housing numbers and drive prices even higher.
Im a builder so ill do my own work if my house floods. I suggest everyone learn basic skills in carpentry to save you money.
My hometown Bakersfield CA was famous in the last housing bubble when a gang of realtors, mortgage brokers, and straw buyer friends n families colluded to buy and sell properties to each other in ponzi like fashion. They bought and sold dozens of properties, made ridiculous capital gains, and manipulated market prices in an entire zip code. They eventually got caught and went to Federal prison. So I've got to ask…. What happens when private capital funds, hedges, high net worth individuals, and shell LLC's do the exact same thing, except it involves hundreds of thousands of properties, billions of dollars, and the national housing market? Nothing?
I live in Florida and the house market is crazy down here, everyone is moving down here. Waiting for this house market crash so I can jump to be a homeowner. Just waiting lol
But I am a Republican! and climate change is a hoax!!!
Investors salivating waiting for the next buying opportunity.
What’s his point? With more homes flooding and fewer homes available, the non-flooding real estate becomes more valuable!
Climate change freaks
Oh, so LITERAL flooding, I thought maybe they were talking about the flooding of supply because where I live, everywhere I look, there's a new apartment/condo building going up.
The fact that there is already an excessive amount of demand awaiting its absorption, despite how everyone is frightened and calling the crash, is another reason why it is less likely to occur that way. 2008 saw no one, at least not the broad public, making this forecast, as I'll explain below. The ownership rate was noted to have peaked in 2004 in the other comment. Having previously peaked in the second quarter of 2020, we are currently at the median level. Between 2008 and 2012, it dropped by 3%, and by the second quarter of 2020, it had dropped from 68 to 65.
The longer we wait, the more expensive they get. This is insane. There are no right answers. Western Sydney got smashed by massive floods and prices still went up. It's insane to live in a rural area, earn 6 figures and still be poor. Our country (Australia) is in serious trouble.
Engaging in an individual option is fair but its performance level can’t generate high dividends. Diversification is the secret to optimal performance, that’s why I have my interest set on options based on projected growth and performance.
Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
I've been watching the housing market closely, Prices have been skyrocketing for years. It's going to be tough for first-time buyers to enter the market." how can one diversify $280k reserve .
People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Sure I'm not alone in my chain of thoughts.
I anticipate a housing market downturn due to the numerous individuals who purchased homes above the asking price, even with favorable interest rates. Despite the low rates, many are now at risk because they lack equity. If housing prices continue to decline, they may face difficulties selling or even risk foreclosure if they can no longer afford the property. This scenario is likely to impact a substantial number of people, particularly with the anticipated surge in layoffs and the rapid increase in the cost of living.
so this entire segment is about global warming. oh sorry, it's called climate change now as to help them have it both ways
Why are American houses built with chopsticks???