The Norris Group Real Estate Podcast

I Survived Real Estate 2025 Part 3: Economic Panel #937

• The Norris Group, Craig Evans

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I SURVIVED REAL ESTATE 2025

The Norris Group Presents: The 18th Annual I Survived Real Estate – LIVE at the Nixon Presidential Library

The Norris Group’s award-winning black-tie gala, I Survived Real Estate, returns for its 18th year.  Since 2008, I Survived Real Estate has supported Make-A-Wish OC & IE—and thanks to your generosity, we’ve now raised over $1.2 million for children in need 

This year’s backdrop?


A California housing market still starved for inventory, mortgage rates hovering above comfort zones, affordability hitting generational lows, inflation and tariffs. Add in global uncertainty, sticky inflation, and the ever-watchful eye of the Federal Reserve—and you’ve got a landscape full of questions.

  • Inventory Drought: California’s housing supply remains critically low
  • Rate Pressure: Mortgage rates linger well above buyer comfort zones
  • Priced Out: Affordability has collapsed to generational lows
  • Global Tensions: War, tariffs, and instability rattle investor confidence
  • Inflation’s Grip: Costs remain stubbornly high, squeezing margins
  • Tariff Troubles: Rising import costs could ripple through construction and development
  • All Eyes on the Fed: Every rate hint could send shockwaves through the market

 Our expert panel brings top minds in economics, investing, and housing to help us prepare for what’s next. I Survived Real Estate was born from crisis, with a mission to unite thought leaders, give back, and guide our industry forward. 


In this episode:

  • The Fed’s interest rate decisions and their effect on inflation
  • Border closures and their impact on employment and affordability
  • Is California at a breaking point with housing affordability?
  • Economic forecasts and the future of the housing market
  • Doug Duncan on a potential tax refund “sugar rush” in early 2025
  • The impact of tariffs and shifts in the job market
  • Healthcare job growth and broader economic concerns





The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669.  For more information on hard money lending, go www.thenorrisgroup.com and click the Hard Money tab.


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Narrator:

Welcome to The Norris Group real estate podcast, a show committed to bringing you insights from thought leaders shaping the real estate industry. In each episode, we'll dive into conversations with industry experts and local insiders, all aimed at helping you thrive in an ever-changing real estate market. continuing the legacy that Bruce Norris created, sharing valuable knowledge, and empowering you on your real estate journey. Whether you're a seasoned pro or a newcomer, this is your go-to source for insider tips, market trends and success strategies. Here's your host, Craig Evans.

Joey Romero:

The Norris Group is proud to present our 18th annual gala. I Survived Real Estate at The Nixon Presidential Library on Friday, September 12. Since 2008, our event has raised well over a million dollars. This year, we'll be raising funds again from Make-A-Wish OC and IE. Individual Tickets are available now. To get your tickets, go to isurviverealestate.com click the link here in the card. We would like to thank the following platinum sponsors, uDirectIRA Services, The San Diego Creative Investors Association, DouglasBrooke Homes, MVT Productions, Realty411, and DBL Capital.

Craig Evans:

All right, so we're gonna get started, now. Do I need to take this? I don't know who's you stole there. I'll hold on to it. How about that? We're gonna get started. We're gonna start first with our Economic Panel. We've got some old friends that you guys have known for years, and are some of my favorites. And then we've got some new people that have never been to the stage with I Survived Real Estate, and I'm excited for you to meet these. Some of these have been friends of mine for a while. Some of them I just met, and we're having a blast. So first of all, I want you to meet Dan Wallach. Dan is the current CEO of Shepperd's Finance and a veteran of the housing industry since 1985. Dan was a former CFO of 84 Lumber and created more than 2 billion in lending programs for builders. Dan knows how to structure deals, manage risk, and keeps projects moving even in the toughest markets. Dan, thank you, my friend. Appreciate it. Next, we've got Oscar Wei. Oscar is a Deputy Chief Economist at the of California Association of Realtors, where for more than 20 years he's analyzed housing trends, affordability and consumer behavior. His insights are regularly featured in the LA Times, NPR, and the San Francisco Chronicle, making him one of the state's most trusted housing voices. Oscar, thank you for joining us, my friend. And again, a man that to this room needs no introduction, but I will attempt, Doug Duncan. Doug is a former Chief Economist at Fannie Mae and has been named one of Bloomberg Business week's 50 most powerful people in real estate. He's guided national housing and mortgage forecast for decades, and is one of the country's go to experts on what's happening in the economy. Please give a warm welcome to Doug Duncan. All right, let's get started. So Bruce was probably a lot cooler than me when he would do this, but we're gonna go with this, okay? Even though I feel like I just fell in a hole here, I got me the short chair, I feel like I'm the kid in detention now. All right. Where am I? There we go. All right, one of the first things that I want to kind of dive into, if I can get my right list here. Doug, I want to start with you. I want to ask, our investors have been watching, and we talked about this a little bit ago, investors been watching about inflation rates, you know? They're studying that closely. We'll get into later, you know, and we can touch on that, but we'll get into later about whether that's the big push and pull on the market as well. But what's your best case for interest rates for the rest of this year and through 2026? Nothing like putting you on the spot.

Doug Duncan:

I guess the safe answer, they'll go up and down. The Fed's going to cut. That doesn't mean long rates are going down. When they cut the first time in this cycle, mortgage rates went up. It really depends on the bond market's mood. In a sense, the moodometer could be applied to the bond market. Right today, they've basically forgotten about inflation. They're focused only on this fight with the Fed about lowering interest rates. So I would say chance are pretty good, that they're about where they'll be for the rest of this year. And then the question is whether there is something that triggers them to start thinking again about inflation, because inflation is not at Fed's target. In fact, it's going the other direction. So if inflation continues to grow, Fed's going to have to focus on that, and that changes the direction.

Craig Evans:

So, how much are they taking into, you know, because the mainstream media, when they're talking about inflation, and then even, well, let me backtrack. Well, let me pause inflation for a second. When we're talking about unemployment, how much do you think that comes into play into Fed's decision on changing rates?

Doug Duncan:

The Fed today is focused on employment, not inflation, so and basically that was chair Powell's speech in Jackson Hole Wyoming was to say, given the risks on either side of our dual mandate, we're moving toward focusing on the employment side.

Craig Evans:

So from what the mainstream media talks about, they're talking about the U-3 how much of that are they looking at U-6 to make their determination so?

Doug Duncan:

Well depends on who you talk to in the media, but I'm not here to make enemies.

Craig Evans:

Yeah.

Doug Duncan:

think what's going on now is a failure to fully understand the all the implications of closing the border. So I was having a conversation with somebody in the in the cocktail hour about the fact that in the payroll data, you are to report everyone who works for you in the benchmarking tool that got the attention on Tuesday that excludes people that are not eligible for unemployment compensation and illegal undocumented workers show up on the first one because they are workers, but they don't show on the second one. So the 1000 people there, they mean the 900,000 jobs that went away are likely to be illegal. People that were over reported, in a sense, in the payroll data. So it's not there's this is not a function of layoffs. This is a function of an underlying need to think through all the implications of cutting off immigrant labor.

Craig Evans:

Oscar, let me ask you. You know, we were talking about affordability. So many people think that, and rightly so, rates will have a play on affordability. But in the state of California, because many people here invest and put their money in California, is California at a breaking point with affordability? I mean, you know, we're seeing, we're not at the lowest of lows, but we're close to where, you know, to be somebody the all time, historic lows for the state of California and affordability. Do you think we're at a breaking point or will California start to see a new reality? Are we gonna have to have to accept a new reality? Maybe, maybe that's a better way to ask that.

Oscar Wei:

It depends on how you define a breaking point.

Craig Evans:

Okay.

Oscar Wei:

Now, you know, if you if we just look at housing affordability, you know, the quarterly number that we publish on a quarterly basis, we actually reached Bruce slides shows, you know it's 15% but we actually hit a lower point at 14% maybe about couple quarters ago. We actually started bouncing back to 15% now the third quarter number will not be available until, of course, sometime in October or so, and then, you know, we'll see more numbers. But if we're looking at, you know, the interest rates and monthly payment and how much people are paying on a regular basis. It actually in the third quarter, it's possible that we might actually start bouncing back. Now, the reason why I think it's bouncing back is because of, if you have been paying attention to some of the monthly number, our monthly median price, in fact, actually decline on a year over year basis for the third month in a row.

Craig Evans:

Yep.

Oscar Wei:

Now people might be panicking like, 'Whoa, it's actually started declining on a year over year basis. Is this something that we should be concerned about?' The decline in price that we're seeing is only about one or 2% so we started seeing some moderation, partly because of seasonality. But the other part of it that we typically don't talk about too much is, remember, the number that I'm referring to is the state median price. So that means it is the price right in the middle. So the question is, are we actually seeing some decrease in price, or we are seeing a mix of sales change. Mix of sales change could possibly be, well, maybe at the high end, the more luxurious properties, we're seeing a little bit of a softening in sales, and for the more affordable segments, maybe not as much. So that's why the median price actually dipped a little bit.

Craig Evans:

Alright, so let me ask you, is that sales volume or sales number? As far as this the amount of a singular transaction.

Oscar Wei:

It's a sales number, number of units sold.

Craig Evans:

Okay. Transaction amount. Okay. So this next one, I'll start with Dan, but

Oscar Wei:

Right.Now, here's the thing though, to keep in mind, though, and we do that on a month, on a yearly basis, and I'm glad that you brought up the moodometer. I do have some ideas for you and Andrew. On an annual basis, we look at, we do a survey called the Annual Housing Market survey, and we send out a survey. We ask about how many people are first time buyers, how many of them are actually repeat buyers. And in the latest number that we saw, we saw that for 2025 the overall median monthly payment overall, including first time buyers and repeat buyers, actually dipped a little bit from somewhere around 3200 to 3010 so it stepped a little bit for all buyers. Guess what happened to first time buyers? The monthly median price for first time buyers, which has a lower price, whole price, home price, the monthly median price in 2024 was somewhere around 3400 or something like that, it jumped to 3800 so that number actually suggests to me that, well, first time buyers are actually having a tough time, like what your moodmeter says. But the all time buyers, are all buyers are actually paying less because of the price equity, home equity increased. Now all of a sudden of course, this year, we have some concern about really, uncertainty, about the policies and things like that so and of course, we did have some fluctuations in the stock market. Maybe the high end people, high end home owners, actually pull back a little bit, and that's cost the median price to drop a little bit. I'm sorry, just to be clear, in 2025? 2025 through the end of, so the remainder this year and through the end of 2026.

Dan Wallach:

Gotcha. Okay, so I think what's going to happen is, I do think when we get to the middle of next year, I think we'll see lower interest rates, and I think that because...

Craig Evans:

Short term rates ormortgage rates?

Dan Wallach:

I mean mortgage rates.

Craig Evans:

Okay.

Dan Wallach:

And I heard what Doug said, and I think that's interesting. And I my view on it is that Trump will get his way somehow, and mortgage rates will come down. So if that happens, then I think the home building industry will be more productive than it is right now. And I think if you look historically, almost every recession and every reversal of recession, let's say coming out of recession is usually led by the home building industry. And I think this is no exception. So right now housing is down, and I think housing will be coming up next year. So I think right now we're in a, you know, somewhat of a economic lull, but still GDP is going up, and, you know, unemployment is not bad. So I just think it'll be kind of ho hum, and then I think next year will be a better year economically. And for you folks in the room, I think there'll be more activity. I don't know that that means that, you know, it's all going to be very profitable activity, but I think there'll be a lot more activity a year from now than there is now.

Craig Evans:

Well, all right, before I go to enforce the..., either you want to chime in on that?

Doug Duncan:

I think that I agree we're likely to be more of a muddle through kind of an economy for next year. Part of it is there's a quirk in the way that the OBBA is trying to find a fancier way to say that 03BA or something like a Star Wars tax policy or something, it's retroactive. The tax cuts are retroactive to the beginning of 2025 but no change in withholding was made. So what's going to happen is, when people file their taxes at the beginning of next year, they're going to get a lot more money back than they thought. I saw an estimate the average household will get probably about $3,000 more back in tax refund than they're anticipating. That's kind of a sugar rush to the first half of the year.

Craig Evans:

Yep.

Doug Duncan:

Which might well offset some inflationary impact on household thinking. So we might make it through next year, without note.

Craig Evans:

Any agreement there or...

Dan Wallach:

Yes and no.

Craig Evans:

Okay?

Dan Wallach:

And I'm glad, I'm glad you asked me this question, because, you know, I just revised our forecast a little bit on the economy. And I think I agree with both of you in the sense that now, if you look at the year over year, you know whether we're going to see positive growth. Economically, we see positive growth this year, and then we see positive growth next year, for 2026. If we go by quarter to quarter, I personally feel like, you know, maybe the third quarter and the fourth quarter, we may be able to get passed by with a positive growth number, but in the first quarter of 2026 I'm a little concerned. I'm a little concerned, because some of the numbers that I've seen in terms of retail sales, in terms of, you know, the inflation flaring up a little bit. Now we still, we haven't seen inflation flaring up, you know, quite significantly. But I'm concerned about, there's the odds of a, what we call secflation That, you know, I think the Fed definitely it was going to cut. They're going to cut rate, you know, in September, October, probably maybe even one more time before the end of the year. So 75 basis point. But at some point in the first quarter, maybe the second quarter, they probably will stop a little bit because of concerns about inflation, and that's when I am concerned about a slightly economic slowdown. Whether it's going to get to negative or not. It's really hard to say. I personally feel like we may actually have one quarter of negative growth. Technically, of course, with two negative, two quarters of negative growth, we are in this recessions. But I think it's still very debatable whether we're going to get there.

Doug Duncan:

Are you allowing go? Are you allowing go backs?

Craig Evans:

Absolutely.

Doug Duncan:

I didn't clarify the rules upfront. The other thing that I think has people thinking about recessions and that they're focusing on the labor market is if you put yourself in the position of the CEO of an industrial company that sells things overseas or buys inputs overseas. And today, the president tells you the tariff upon the first of October, the tariffs are going up 50% and then the week before the first of October, he says,'Well, I didn't mean that' you can start to imagine the difficulty of making decisions on hiring or not hiring. What's not in the labor data are layoffs. There's not been a big drop. Unemployment went from 4.2 to 4.3% which historically is full employment. But what's not happening is the private sector is not hiring. The only job categories that added jobs were healthcare and social services, both of which are either directly or indirectly funded through government. So the private sector is waiting to see what's going to happen on the horizon with regard to tariffs.

Craig Evans:

Anybody want a second to go back?

Dan Wallach:

Yeah, I have one other thing. I think, if you think about your businesses out here, when we think about what he was saying, the low end market is good in most places. And I think that's going to continue. As long as you know rents are high, then the low end market for housing sales should be good. I think the problem we're experiencing right now in the building industry and in the real estate industry is the middle market, you know, the upper market, these people interest rates kind of don't matter. Either they're not making a payment or their payments irrelevant. They're more stock market driven, but in the middle market, it's very interest rate driven. And I think that is the danger market for you now, but as I look at it, you know, underwriting low. That we do today for construction, when I look out, you know, at mid next year, when these things are going to be built, I think the the market will be attractive for the middle market as well.

Craig Evans:

This is good. Go.

Oscar Wei:

Say that, I'm sorry?

Doug Duncan:

...sell 4 million existing homes this year, roughly?...going to sell about 4 million existing homes this year, roughly?

Oscar Wei:

At the national level, yes.

Craig Evans:

Actually, yes.

Doug Duncan:

That's the same number that were sold in 1995 there are 80 million more Americans today than there were in 1995.

Craig Evans:

Yep.

Doug Duncan:

That, to me, is a compelling story about why you should be in the business here.

Oscar Wei:

So just a couple things like that, you know, Doug mentioned about, you know, the job growth in healthcare, primarily. One thing that concerns me a little bit, and that's why I'm a little concerned about, you know, the possibility of seeing an economic dip is, yes, the healthcare industry is kind of hearing the job growth right now. But what I'm concerned about is, you know, the bill, the Trump's bill, that could be, that got passed, Medicaid could be cut. That means there could be some effect on, negative impact on the healthcare industry. Now, if that indeed actually happened, that could actually pull back the healthcare industry's job growth a little bit. So that's what I'm concerned about a little bit in terms of job growth. And as far as the middle segment of the housing market. I want to add a couple of things. What I want to add one thing from that same survey that we did, annual housing market survey that we did, we saw that as far as the number of years that people stay in their home before selling, they'll actually search all the way up to 15 years. That's the record high that we have had in the last you know, since the beginning of the year. Now, the reason why it may have gone up to the highest level, people might think, well, people are staying in their home for a little longer they're not selling because of that lock in effect, because of the mortgage prisoners of act, whatever that is, right? I actually have a somewhat different feeling about that. The reason why it actually went all the way up to 15 years, it's not only because, yes, I think there is a still a little bit of lock in effect, but at the same time, what I mentioned earlier, the first time buyers, the entry level people will actually hold on to their who have their properties. They are not able to move on to the next home because of lack of you know, because interest rate hasn't come down yet. But the other part of it is the people who actually purchased for the last six years, seven years, because of the because of them locking in at the very beginning of 2020, 21 they were going to wait a little longer. So who was selling the people who actually stay in their house for 20 years or so actually push the year off tenure a little bit longer. So we are actually missing those people who actually purchased home in six years, seven years, eight years ago, and those might be those people who actually purchase home at the sort of middle income level. So that makes it a little tough, and that could actually make the median price a little bit more volatile, because we don't know exactly what's going to happen with, you know, the low end or the high end.

Joey Romero:

Don't forget to visit isurvivedrealestate.com for tickets to the event on Friday, September 12. The Norris Group would like to thank the following Gold sponsors, Keystone CPA, The Inland Valleys Association of Realtors, Pasadena FIBI, The North San Diego Real Estate Investors Association, LA south REIA, NorCal REIA, The Wizard of the Wobbly Box, Andy Teasley, Shepherd's Finance, The Thompson Group, PropertyRadar and White House Catering. The dinner wine is provided with a generous contribution by Rick and Leanne Rossiter. Hope see you all there. oey

Narrator:

For more information on hard money loans, trust deed investing, and upcoming events with The Norris group. Check out thenorrisgroup.com. For more information on passive investing through the DBL Capital Real Estate Investment Fund, please visit dblapital.com.

Joey Romero:

The Norris Group originates and services loans in California and Florida under California DRE license 01219911. Florida mortgage lender license 1577 and NMLS license 1623669. For more information on hard money lending go to thenorrisgroup.com and click the hard money tab.