The Norris Group Real Estate Podcast

Bruce Norris Market Timing Journey | Part 2 #944

• The Norris Group, Craig Evans

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From local market signals that reveal broader trends to the rising influence of AI on jobs and housing demand, Bruce outlines the forces shaping the future. He also breaks down key economic indicators — including national debt and renewed student loan burdens — that could impact the market in the coming years. Packed with forward-looking insights, this conversation helps investors prepare, adapt, and make smarter decisions in a rapidly changing landscape.


In this episode:

  • Why today’s market feels “uncharted” — and what signals matter most.
  • Understanding local market dynamics: How local market patterns can reveal national trends.
  • AI & the Housing Market :The growing influence of AI on jobs, demand, and the future of real estate.
  • Key economic pressures: national debt, student loans, and shifting affordability.
  • Practical insights to help investors stay prepared for what’s ahead.


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:

Welcome back, everybody to the Norris group real estate podcast for part two with Bruce Norris and his market timing journey. Hope you enjoy. Just kind of for your knowledge, it was July 16 of 2020 when it went under three. That was the first time. And then, we actually enjoyed almost 18 months of, you know, two it got less. The lowest they got was 2.69 okay. But then so from July of 2020 to January of 2021, it went, it stayed under three. So it was a good run where a lot of people did the opposite of, they refied, theydidn't take money. They just refined because they were just lowering their monthly.

Bruce Norris:

Right.

Joey Romero:

Right?

Bruce Norris:

They refined it three or four times and just kept on. But I tell you the other thing they did sometimes is they did pull out money, but it didn't change their payment. And what they did is they added a room that they've always wanted, like an office, or they put a pool in at no monthly cost. And that's why you have so much solidity in today's real estate market. There's a lot of people aren't going anywhere. I'm good, great.

Joey Romero:

How do you feel now that it's 38 trillion? Do you think we're going to hit that 40 trillion?

Bruce Norris:

Yeah, in about a year.

Joey Romero:

Because we went from 37 to 38 in a year, right?

Bruce Norris:

Yeah, it can go up. It can go faster than that, probably will. So, yeah, you'll have 40 trillion within 12 to 18 months for sure.

Joey Romero:

Wow.

Bruce Norris:

But see, that's, the bond market is not happy about that. There's, you know, that's the, that's one of the things that you know, we'll talk about when we get to the why this report that we're going to do is important. That's one of the problems. There's really, some really smart people like Ray Dalio who talks about the dollar losing its world currency status because of that. Well, that's, that's a very big...

Joey Romero:

Yeah, that's, that's, that's in my notes later on. Okay, so let's, let's fast forward to 2022, you released Uncharted Territory. But you quickly followed that up in 2023 with what you called your your last report. And that was What's next 1% because, well, let me just say something about Uncharted, Uncharted. You were literally saying, like, Hey, we're headed, we're headed into uncharted waters, because, you know, we haven't been there. And you had, you had an idea of what would happen, and it actually turned into like, what your two outcomes, what you thought your two outcomes were going to be, it was either going to be a 1% mortgage or a lost decade, and that's what the title of the 2023, report was. Now, you settled on the Lost Decade. Can you, can you talk about why it wasn't the 1%?

Bruce Norris:

I wasn't 1% because the mortgage rate wouldn't go down that low. In other words, you would need that to accelerate the prices, okay? Just like we needed a 2% mortgage to do the crazy thing, but we did the crazy thing with the 2% mortgage, and we got everybody in when they were euphoric at the very a lot of people went in at the top with this big purchase price, but they had a mortgage rate that started with a two. And so, I mean, they're good. So what's interesting is, that's why this is such a safe journey. To the next up movement is that you're going to have very little price movement because you have no room for it. Okay, when you go from two and a half to 567, okay, well, that price should come down, except for no REOs and all the people that have a two and a half to 4% mortgage going, I'm good. So there was just enough inventory matched with just enough buyers. Now what we did say in that report is the big problem is the industry will be in a Great Depression as far as. Commissions. So if you look at the commission structure for the entire industry, for doing loans and getting commissions for selling real estate, it's 45% off. That's 45% unemployment. That's a great depression.

Joey Romero:

Yeah. Has there been, so is there other places where there has been 1% mortgages or lost decades around the world?

Bruce Norris:

Don't know the answer to that 1% mortgages? No, I don't think so. But you could say that maybe is true in Japan. I'd have to think about that. I think Japan had such a big price increase that they did go down to a very low interest rate, probably just the same, taking back properties and stuff like that. But I'm not sure about that, but I know they had very low interest rates for a very, very long time.

Joey Romero:

Well, I think I remember sending you Japan's last decade.

Bruce Norris:

Yeah, lost 25 years.

Joey Romero:

Yeah, that's a little longer than a decade. Yeah. All right, well, so let's talk about your latest endeavor, which is Beyond Uncharted What's next has never happened. Let me start by saying, in 2023 we told everybody that this was going to be your swan song and you weren't going to do it anymore. So just for the record, Bruce, I'm never going to say this is your last report ever. So that will never be, because you actually wrote that in the piece that you wrote for me to promote it. You said one last time. I said, "Nope, taking that out". Because I feel like as long as you're capable, and as long as you're you know you're able to you're always going to want to help investors. So that's just how I feel. And I think...

Bruce Norris:

It's not just that I discover things that, okay, I don't know enough about that, you know, that's kind of what this is about. You know, we'll have the normal charts and go over the history and all that, but there are some very significant things that have never happened. And you're going, Okay, well, how does this work? I mean, and it's over my head. So as you know.

Joey Romero:

I'm gonna get into, I'm gonna get into this a little bit right now. So, all right, so, but first of all, on top of what we're gonna give California investors, are you going to try to expand this, to make it, give it more of a national feel, and how they could, you know, interpret it into other markets. Because I know there's a lot of California investors that are now investing in other places, Indiana, North Carolina, Florida, Texas, Nevada. So are we going to try and, you know, tie how you see things in California, and maybe say how this would work on a national scale?

Bruce Norris:

Yeah, it's one of the reasons it's been easier to discover the sequences is that California is exaggerated, okay. So when you go, when you have the charts, it it's got more of this going on. I don't know that I would have been able to figure out if, had I gone to Texas or Florida, which is like ehh- for a long time. I don't, I don't know that I could have made the discoveries I did California, you know, ran up to double the national price, you know. And there were characteristics of that. And then when it came back down some all of that told a story that was really only true in California. But then you realize, when you start doing Florida, okay, it's a moderate version of that the emotions of the buyer and seller are reacting the same. It's just not as exaggerated. And so, yeah, I think the combination of doing the Florida and California report will tell a story that is national. In other words, are you don't buy a house in the nation? So that's, it's kind of pointless to say that. So in other words, pointless to do that. But you can say, Okay, are you in a state that's similar to Florida or similar to California in your price aggression and giving it back, okay? And...

Joey Romero:

Well, have you ever looked at what, what places are like California, what, which ones mimic the national scope?

Bruce Norris:

I'd have to say you'd have to go to the highest price places. You know, you'd have to go, probably go to Hawaii, New York. But again, New York is very different. You got the city and you got all that. So I'm glad I got stuck with California, because it seemed like it was, that was a very telling thing. So, and I think, I think what I what I've also said is you kind of had a have a roadmap. So if you want to go find something out in Tennessee, get the charts. You know what the story is, see what's the story is. Where are you as far as maxed out to your capacity in Tennessee? You know, there'll be history of that. That's all we do. You know that type of. It.

Joey Romero:

And now we have the actual mood that, that we have for the whole country, the whole state. Now, one of the things that people would always talk about is your big number was affordability. Oh, is Bruce thinking it's going to be 17% all the time? Or now we've been camped out under 17 for three years now. Have you...

Bruce Norris:

...first time ever.

Joey Romero:

That's what I was about to ask you. Has that ever happened?

Bruce Norris:

No, and that's why the title is very, is very viable, that you have a lost decade, because you're not going to build a lot of momentum on sales. People are going to like when it goes up to 19. Everybody think that if you lower interest rates, so going to be a big deal? No, it's not. They're not in the mood to buy. They probably made a decision to,'okay, I'm going to rent for another year'. The payment when he gets to 17 is historically the max payment. So you get to 17, 18, 19, you don't have a rush to go, 'oh, yeah, I want to buy that', we're a long ways away from that. The only reason we don't have price damage is you don't have a bunch of people going, 'I gotta sell this stuff'.

Joey Romero:

Well, and then how many people also, like, miss their windows, you know? Have a different job, don't, aren't in the same situations where, you know what? Like, yeah, affordability when went up. But me, personally, I can't buy a house now, you know. Now one of the things that I'll wait for, I'll skip the next question I have. But you know, innovation is great, and you know, you know, Aaron used to talk about it all the time, but one of the things that people fear is what's going to happen with artificial intelligence.

Bruce Norris:

Yeah.

Joey Romero:

You know, artificial intelligence is going to be, is, I think it's going to cause great harm before it causes, you know, gets everybody back to, you know, a place where they're happy, because there's going to be a lot of things that are going to be replaced. And so my question is, what's the biggest danger to the housing market is it, how it's going to affect unemployment?

Bruce Norris:

The housing market, you know, I'm just trying to think the job replacement in general was say, I can't say that. I've come to a conclusion on it. But if everything is get so automated, you just need less people. I mean, I guess that's the biggest thing, like mortgages. I think, I just think that could be very machine driven, if you will, you know, and it probably already started and all that. But there's a lot of jobs that are going to disappear.

Joey Romero:

I have a buddy that I play frisbee golf with, and, I'm out there playing frisbee go with them, and he's just getting these leads where the AI, the AI chatbot, basically takes them through everything other than signing on the dotted line. And so...

Bruce Norris:

See you just mentioned that one of the big buyers in San Diego is training, in training AI to close people on the purchases. Yeah, they do it like, they're trained to say the when, the when the seller says this, this is Yuri's month, you know, that type of thing. Holy cow.

Joey Romero:

And so you've always talked about, where are the next, where's the next wave of have to sell houses, right? So, if we get to, what percentage do you think we would get to an unemployment where people are going to be like, 'Oh crap, I can't afford to live anymore. I can't afford my house'. Like, would it be 10%, 20%?

Bruce Norris:

Man,I don't even know the answer to that. I, you know, it's, Sean O'Toole 10 years ago, and I asked him about a month ago about his statement, he said that, what our country has to figure out is how to have society where 50% of the people don't have a job, 10 years ago, he said that I asked him if he thought that was still true a month ago, and he said Yes, so that, of course, that'll be unbelievably impactful. I mean, so, that's why, you know, again, that's one of the reasons why doing this report to try and contemplate the sequence that that entails. Because every time I'm watching something on YouTube, like I'm watching Warren Buffett teach for an hour. Hey, you know, you realize that's not Warren Buffett. It isn't, it's his. It's his, what?

Joey Romero:

His avatar.

Bruce Norris:

Avatar, yeah, and so it's probably what he said. The conference where you're watching, and you think, Okay, well, wow, I get the Oh, and then you go, and it's not like that. You just realize there's a lot of substitute for humans coming, for sure. And I it's over my head, which is, you know why I appreciated delegating that to you, Joey, and I know you own eight books, and it's, and it'll get you to a different understanding than I can. I bought two books. I only read the first chapter of AI for dummies. So it was very fitting. I realized that I have no business teaching the chapter, but well, go ahead.

Joey Romero:

I was just gonna say I am looking forward to this challenge, because not only do I know the history of what your time reports have done, what they're intended to do, and I'm looking forward to see how this will really tie to real estate and how it's going to affect, you know, buying and in real estate investing in general, how it's going to, because buddy Buddy has some great tools for real estate investors, but that's just talking about learning, teaching you how to, how to use AI.

Bruce Norris:

Right.

Joey Romero:

You know. And so, the impact that AI is going to have is going to be far wider than one or two industries. It's going to be every industry.

Bruce Norris:

Yeah, I mean, I kind of sense that, and I, I don't even know how to contemplate the end result of that, because you're, correct in saying, okay, well, if you thought your career was going to be, you know, fixed for a long time, and then it's, you're gone. It's like, okay, I have a house payment, and I, you know, and that's what, that's what Sean was talking about. How do you have society when half of the people don't need to work, they don't have a job. Let's put it that way, and whether it gets that bad or not, but it also seems like a race, in a way, where the people that are at the smartest, at the top are pushing it as quickly as possible. So it's sort of like a competitor. I think nations have that feeling like, if I get there first, America, we're better than, if China gets there first, that type of thing. Some companies are also aggressive, you know?

Joey Romero:

It's a big part of the stock exchange right now too, all there's so much money tied into it. So, so while and a lot of people feel that it's propping up the of the stock market because, because there's two economies, there's the stock market economy, and then there's the real economy that we live in, right?

Bruce Norris:

Right.

Joey Romero:

And the one that we live in right now doesn't feel very good.

Bruce Norris:

Right.

Joey Romero:

You know? So, so the stock is really indication of how well I'm doing as as me and my family, you know? And so that's what's, that's where people are right now. Now, one of the other things I wanted to run by you is, Gold, since January 1 has gone up 50% that's a huge run. And that's, there's a couple reasons for that, right? There's, there's fear. So people are, you know, trying to, trying to get their hands on as much as they can. Did you know when was the last time that this happened? When it went up 50% in less than a calendar year?

Bruce Norris:

Probably what '80?

Joey Romero:

1971.

Bruce Norris:

'71. Okay.

Joey Romero:

So you know what followed after that? Are you worried that that inflation is going to stick around and going to explode here in the next few years?

Bruce Norris:

Well, you know, well, so interesting. So that's a very interesting question because of where we are in affordability. So okay, historically, we have, you know, a fairly average interest rate, let's say, at 6% or something like that. When it's matched with our price, though, it's the lowest affordability that we've camped out at ever. So if you have inflation and you give this real estate market a 10% mortgage rate, well, it'll lock in everybody that has a free and fair house. It'll lock in everybody that has a mortgage rate, and it'll wipe out the people that are on commission trying to sell something, because they'll even be less volume. Will there be ton of foreclosures? No, you'll just now have a reason. It's very interesting, Joey. So to think back to 74 to 80 when interest rates went from seven and a half to 15. So when you get to 1980 there's a lot of bad charts that happen. So you've helped me put these together. We have unemployment at 10% and you don't have, like now, we have eight months of inventory. We're freaking out. You know how many months they had? 24 months of inventory, okay? And they had 10% unemployment. What was the price damage, zero? Well, one of the reasons was they had everybody at a mortgage at seven and a half, right? Five years ago. They were good.

Joey Romero:

Stayed there.

Bruce Norris:

They just stayed there. They didn't lose their house. So it's interesting that we could be facing, and that's, you know, one of the reasons really, taking a look at the debt, you know, there's a lot of very smart people that are looking at national debt, going, that's scary stuff. It's getting too large. We could lose our reserve currency status. Well, that's a very big statement, and made by a guy like Ray Dalio. That's no joke, because Ray Dalio, like I, studied 50 Years of real estate charts. He studied 500 years of world history and charted how every country lost world reserve currency status. And he feels like the US is nearly it's stage five of the of the journey.

Joey Romero:

He's got five stages, right? And we're four right now.

Bruce Norris:

Headed to five.

Joey Romero:

Headed to five. And you and what I don't like about that is, it's revolution or war.

Bruce Norris:

That's right, that's very upsetting to society, because there's the haves and the have nots are accelerated. So, yes, so you can, that's why, you know, in our lifetime, this really hasn't occurred before. So there's a haven't worried about the dollar not being the world reserve currency. And there's just a lot of things to contemplate, you know, and that, I always like when I'm writing a report that I would I want the answers for the questions myself?

Joey Romero:

It's just like when we do our, when we do the tactics, brunches and you're asking all the great questions, but it's because they're just questions that you want to know.

Bruce Norris:

That's right, you know that's when. So when I when I study this stuff, I'm not just studying it, just to teach it. I'm studying it so I can comprehend it for my own life decisions too, you know? And I just realized, I think there's some new ones I have to contemplate.

Joey Romero:

Yeah, I think, it's, I think it's it's going to unwind over a longer period, than it has in the past for a couple reasons. One, there's there's not. Number two, currency that's that close yet. And also, the debt that is held is still held in dollars, not in other currencies. So that's going to keep us from unwanted I'm not saying it's not happening, because, you know raise, also not sure that it won't happen. And also, the other thing that he's, he's not sure that will happen is that it would be a violent war, that it may, there might be a, you know, some sort of a revolution that can happen that doesn't lead to violence. It's just, it will, something drastic will change, and hopefully it's, it's something that we can be civilized about it, you know.

Bruce Norris:

Yeah, or or avoid it. You know, that's, I guess that's the other thing is, if you have a roadmap, well, why don't we not go down that final road, which corrects some stuff?

Joey Romero:

So, all right, let me ask you one last question. What do you want investors to take away from your next report?

Bruce Norris:

I think I just want them to look at the future with a little better, clear vision of something that's never occurred. You know, that's the, I think that's the goal for this report, is to contemplate AI and the country losing world currency status and a few other topics that, you know, you just have to prepare yourself in the event that happens. How do I change what I do, to be, to land on the on my feet, you know? So it is interesting that even have to contemplate things that in this report, because I really had never thought about that. You know, it's interesting, too, when you look at, one of the things that's happened recently is college debt has been released again and has payments and consequences. So it had been dormant for quite a long time. No payment. Just sit there, and all of a sudden, when you look at a delinquency rate, that was zero until the last six months, and it zoomed ahead of, you know.

Joey Romero:

Oh, yeah, no, it's crazy. I saw this chart. I just, I just, I was just looking at that, that consumer report from the New York Fed, and it's, I mean, everything's jumbled in the middle, and then recent that's just literally like, like, No, I don't even, you don't even call it hockey stick. It's just straight up.

Bruce Norris:

Okay, well, think of the consequence of that. They're in the house, flying rage, okay.

Joey Romero:

Yeah.

Bruce Norris:

Yeah. Well, you, you don't have enough money, you can't even make your payment to your college. You just ruin your credit. So are you now a renter? So, you know, Warren Buffett's company just spent billions of dollars, and what stock did they buy? They bought the stock the builders are building rentals. That's what's coming so you're going to go from home ownership to home rental. That's also not a very good society where they feel like, okay, wow, I can't participate in the goodies.

Joey Romero:

Yeah.

Bruce Norris:

So anyway, lot of, lot of things, and I, I don't even know how it ends myself, you know, that's what's fun at doing the last chapter I contemplate all the way until I'm done.

Joey Romero:

Yeah. Well, it's, it's gonna be robust to tell you anything, you know, I don't think I've ever had a first draft of yours that has 500 slides, and that's not even it yet, you know, because there some of that was just placeholders of like, hey, we still have to build this chapter.

Bruce Norris:

Yes.

Joey Romero:

So it's gonna get more but yeah, so it'll be fun. It'll be fun, and it'll be fun to to really participate at a different level for me too. So I'm going to, I'm going to look to make, make Aaron proud, you know, see how he would have done it. Alright, Bruce, thank you so much for joining us. And alright, everybody, we'll see you next week and go to thenorrisgroup.com and go to the Events Page and get your ticket. All right, we'll see you then.

Bruce Norris:

All right, Joey bye bye.

Joey Romero:

Bye.

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.