The Norris Group Real Estate Podcast

I Survived Real Estate 2025 Part 4: Economic Panel (continuation) #938

• 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:

  • Assessing lending risks in today’s economy
  • Shifts in lending standards and credit conditions
  • The impact of California’s policies on real estate investors
  • Exploring future opportunities for real estate investing


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:

So I want to switch over and talk about, you know, because I've had a lot of people talk to me tonight from a lending perspective of, you know, we're talking about rates, we're talking about lending and how to source capital, either, not so much from an equity side, but from a debt service side, right? So, Dan, I want to start with you on this one, and I think we can go through but for investors, primarily the people in this room, for investors that are financing flips, small, multifamily, things like that, what lending risks should they most be aware of right now in the current economy?

Dan Wallach:

Well, I think a great question is, if you go out and you get a construction loan or a rehab loan, and then you're planning on flipping it into something more permanent, right? I think the risk is, what is the interest rate going to be, you know, when you're when you're done, right? And, you know, there are other things like, what's the advanced rate going to be at that point in time during, I would say the largest risk I think you have today, because I don't think rates are going up from where they are the long term rates. So I think the largest risk you have is that your cost of material might get out of control. You know, we were talking about tariffs a little while ago. So if you're going to spend a lot of money on product that doesn't come from the US, who knows, and there is a lot of uncertainty about tariffs, and I will tell you what I know from you know, being in the lumber industry before. You're going to, the lumber suppliers are going to pass that on to you. They're not going to eat, you know, a cost increase. So you know, if they're paying for copper, you know, X dollars, and it's going to go up double, your price is going to go double, and they'll actually make more money, because they're making a 40% margin, or whatever, on, you know, double the price. So I think the risk really is in the cost of materials and I guess overall, Craig, I think that it's a much better time to be doing something today than it was a year ago, because I think rates are coming down, not going up like they did. And I think that, I think a lot of the material cost fears are kind of rolling out of the system compared to where we were a year ago.

Craig Evans:

So staying with lending. Doug, I'll start with you on this. And again, if any of you want to chime in, please feel free to. How do you see lending standards from a debt service side, not equity, but from a debt service side? How do you see lending standards for single family investor loans evolving. You know, do you see there's such an upheaval right now, and I think that's bringing about uncertainty when people are looking and trying to source debt sources right now? Do you see the credit of that tightening expanding, and it is the game flipping and changing?

Doug Duncan:

One of the things that's an interesting to me is in each of his last three or four press conferences after the Fed's meetings, Chair Powell has made the statement that credit conditions are modestly tight, and raises questions about what the economists at the Fed are looking at, because if you look at credit spreads in the credit markets, they're incredibly tight, which suggests that there's significant monetary ease in the marketplace. So I don't actually understand on what basis he's making that claim. So if there is a with a serious whiff of recession, then you start to see credit being priced that I would I would expect to see some widening of spreads, which is going to increase the cost of credit, right? So I think at the moment, while interest rates are high relative to recent history, not relative to long history. Remember the 30 year fixed rate mortgage. It's got a new tongue. Had to break it in since the World War Two, say, since the VA was put in post, is 6% that's the average long term 30 year fixed rate mortgage. So it's a little bit above that, but credit spreads are just incredibly tight, and so if there is a serious whiff of recession, I would expect those spreads to widen, even though base rates may come down because of that, of the recession.

Craig Evans:

Anybody else got a thought on that? Or everybody in agreeing with Doug on that? Okay, well, I'm gonna...

Doug Duncan:

If you get a bunch, you get some economists, so greed. If you lay them all end to end, they won't reach a conclusion.

Craig Evans:

So, Oscar, this will probably be primarily for you. Again, guys, feel free to chime in. But Oscar, I want to ask you, how do you see California policies like rent control, ADU legislation, new housing mandates, things like that? How do you see that shifting for investors, because, again, my goal tonight is I want to give them information that they take and go out and figure out how to do their jobs better. So it's easy to sit up here and start talking at levels that just start to impress me. What puts stuff in their pocket? What's a great takeaway for them? So what do you see out of policies that can make an effect in how they function in a day to day life?

Oscar Wei:

Well, we, you know, at CR, we talk about policies all the time. And I would let the you talk about, you know, rental properties. Every time I go to, I've attended, you know, every year, a couple of sessions on policies and rental markets. I always get someone in the audience telling me that it's hard to rent, to have a rental property in LA, in LA County, that's why people go to San Diego, or some of the places, because of the the required, the difficulty for landlords, for people who own a property and it's probably, to be honest, it's probably, you know, as far as rental property is concerned. It may actually get, it may not necessarily get better the very, very soon, within the next couple of years. Now, we continue to push, you know, at C.A.R, we continue to push and try to get as much as possible done as far as rental property is concerned. And we try to, another thing that we also tried, and some of you probably in the room are, are a little concerned about, of course, is insurance. You know, insurance policies in California, it's tough. We turn from a year, year and a half ago, we have some availability issue. Now we may have a little bit more affordability issue on insurance. We're trying to push for that now, in the long run, it's probably some of the policies are probably good for, like defensible space and hardening and all this stuff probably are good because it protect, you know, the properties from being destroyed. But at the same time, yes, in the short term, it is going to affect, you know, the cost of selling a home or turning around a home. So that part of it. I think, you know, it still need to be worked out. Now the other, some of the other policies, ADUs, I think in the last couple of years, some of the policies that we try to push actually allowed more ADUs to be built. The question is, of course, whether those ADUs are being used as a rental properties or being sold. We don't have a lot of hard data on how many of those are being sold or being turned around, but I think we will have to continue to push for ADUs so that we can have more housing supply. I agree with what Dan mentioned earlier. I think we do need a lot more supply. And hopefully, and in our upcoming meeting next week, we probably will continue to push for more policy changes.

Craig Evans:

Okay, so, you know, historically, we've done, I mean, you know, I've got a friend in the room that literally struggled with a piece of land trying to get permits for 19 years. 19 years for permits on a project. So, how, we're talking about, how do we work through and create policies? What are some of the real things that you see California coming out with over the next 18 months that may change that process? Or is that, is that ever a reality in California?

Oscar Wei:

I think, well...

Craig Evans:

I mean, let me rephrase, aside from an ADU?

Oscar Wei:

I'm leaning a little bit more towards your second choice, which is, it's probably going to take a long, much longer time for things to change, but at the same time, of course, we have heard, and I don't know whether it's going to materialize. We've heard, you know, the Trump administration is hopefully going to work with the state and local government to actually loosen up those zoning issues, maybe making some of those state land, federal lands available. Now, if that actually happens, that could actually lead to maybe a little bit more building, but at the same time, we still have CEQA issue, we still have all these different things that people run into permits, and it's taking two years, three years, four years, five years to actually build. So I think it's a start if we actually can have a little bit more land opening up for builders. Now, the other thing that I also heard, and I'm not sure whether it's going to happen, is, I know, in the bill, and the big, beautiful bill, I don't know what the new name it really is, you can't remember. They're supposed to maybe have a little bit more credits, more affordable housing, whether that is going to really happen and will allow builders and developers to build more that, of course, wait to be seen in the next 12 to 18 months or so.

Craig Evans:

Okay.

Dan Wallach:

My view on this is everyone, most you guys are from California. When was the last time the state of California did something that helped you? I know that the Trump administration would like to make things better, but they don't control the states. And it's not just about California. You know, I live in Nevada right now. It's the same problem. I don't see, I don't see government making it easier at the local level or the state level, and it has been tough. We haven't seen a lot.

Craig Evans:

Okay. I knew you were about to say something.

Doug Duncan:

I was quoted once I gave a speech in San Diego, saying that the thing I love about the California legislature is that they pass laws to deal with the side effects of the laws that they pass. I want to ask a question about California bill. I'm leaving here to go give a speech to 1000 accountants on Monday, rock and cocktail party. But last year, when I spoke to them, I did an audience question. I asked, 'How many of you in the room have a mortgage that's less than 4%?' Like three quarters of people raised their hands. I said,'Now, how many of you, if you're required to move, will keep that house, turn it into a rental and use that to subsidize the higher cost mortgage you take at the place you move to?' So my question for California is, what happens to the tax treatment of that house if you turn it into a rental and buy another house? Does, does it step up? Or does it or change in some way? Because it's that becomes all those people that three quarters of them said that's what they would do.

Craig Evans:

Yep.

Doug Duncan:

So that was, that created a whole new set of investors, right? That was my...

Oscar Wei:

I'm not an accountant, so I can't really say for sure, but, you know, as far as I understand, if you keep your property as a rental property, and then you move on and buy another property, see, then of course, you actually have to pay. You actually have to pay, you know, any of the rental income, you haveto pay, as you know, with taxes, but at the same time, I mean, if you actually turn, if you actually turn it in and and you sell it and move and change it to another rental property, then there is the 1031 exchange. But for the most part of you are keeping multiple properties. As far as I know, there might not be a whole lot of benefit in terms of, you know, tax wise, I may be wrong on this, like I said...

Craig Evans:

There are some new tax bills that are being spoken about right now that may come into play next year that would affect that. So, so, all right, Joey is has already done cartwheels and jumped around and said, I've only got X amount of minutes left, so I can see in the background. So here's what I want to do. I want to ask one final question, and I want you each to chime in. So if we're looking two to five years down the road, all right, what do each of you see is the single biggest opportunity for real estate investors, the people in the room to be looking at and striving for? There's quiet. I can't believe that.

Doug Duncan:

Well, I'll take a one, a stab at one thing there. Obviously, the boomers are aging, and there's going to be some income transfers. And if they, I live in Cape Coral, Florida, which the kids are called like God's waiting room.

Craig Evans:

Yep.

Doug Duncan:

There's going to be some turnover there. And it turns out a lot of the kids don't actually want those homes that mom and dad had. So there's going to be movement in that space. I believe.

Craig Evans:

Look at the biggest wealth transfer in history is about to take place. Either one of you wants to go next doesn't

Oscar Wei:

I'm trying to think because, you know, based on our matter. calculations, based on our forecast, we know that for the next three, four years, well, starting, you know, upcoming year and next few years, we know that sales are probably going to grow. You know, as far as existing home or so, it's good, it's going to grow, but we also know that it's going to grow at a slow pace. And I think you know, if we actually end up having interest rate coming down. And I would believe that is the case. It's going to come down slowly. Now, for there are a couple already mentioned it, you know, I think, you know, as far as first time buyers is concerned, it might actually have gone down to it has gone down to the lowest in the last six years. I think it could actually start bouncing back a little bit for first time buyers and entry level buyers. The question is, obviously whether we have enough supply for them. And I think we could, assuming that we don't hit a financial market correction, we could actually see homes start loosening up a little bit, and I think we could slowly see those movement of maybe entry level buying, entry first time buyers, buying some entry level homes. Now, here's the thing that I think I have to stress also. We did also see a couple years ago, here's a movement of remote working that allows people to move to, you know, maybe Inland Valley, Riverside, some more affordable homes. And that level actually plateaued a little bit. I do see that, you know, if we continue to see, you know, that level of remote working and, you know, interest rates started coming back down, and entry level, first time buyers started picking up again. I think we have, we could see a few more first time buyers coming back to the market.

Craig Evans:

Okay.

Dan Wallach:

I have two comments. One comment is, think about the price you paid for the first home that you bought. Joyce and I, our first home was$55,000 right? And now you know that home must be worth, I don't know, 250-$300,000 right? And it's 50 years older whenever, you know. So there will be inflation in housing over the next seven years, let's say, and I'm going to change your question a little bit to seven years. So yeah, I think there'll be inflation in housing. And the second thing is, almost every seven years there is a downturn in housing, right? So at some point there's going to be opportunity to buy cheap, and yet, you know, seven years from now, real estate will be more expensive. So I think that you need to think about liquidity. You know, when the market is horrible and you can buy, that's when you can't borrow, right? Because you know who's lending on that. So think about now, when decent liquidity is available, how to get yourself into a position where you can borrow money but you're not, you know, lines of credit on things that you own today, so that when the next opportunity comes two years from now, five years from now, you're in a position to buy rather than a, you know, a bystander watching it happen.

Craig Evans:

Very good. Ladies and gentlemen. We have had a great first panel. I want to see if I can get out of the child's chair there. Give a round of applause to our panel. Thank you, gentlemen. Thank you. Thank you. Thank you, Dan. Sorry, yep, we're going to take a 15 minute break. Oh, gentlemen, I'm sorry I was supposed to have given, I was supposed to got pictures with you guys. I'm getting chastised again. We're going to take a half hour break. We're going to have dessert. Let you guys mingle, talk and meet people, share cards, have fun, kiss babies. We'll see you back in 30 minutes. Thank you guys.

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.

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.