Please wait as we prepare your PDF file ....

Mission Chronicle Blog

Search Blog

our goal is to help you stay informed by providing timely and interesting articles.

This ‘Big Short’ investor is betting against mortgage market again

11/04/2019

Download PDF

More than a decade ago, David Burt, then an investing consultant at Cornwall Capital, was one of the few investors to bet against the exploding housing market, prior to the 2008 crash. Burt is betting on the mortgage market crashing again, only this time climate change will be at fault.

Burt, in an exclusive interview published Friday by Vice, said he believes there could be another bubble set to burst and it’s being artificially inflated by climate change denial. 

“There’s a lot of parallels, it’s a big real estate mis-pricing issue,” Burt told Vice. “At its core that presents a lot of the same risks.”

David Burt | DeltaTerra Capital

David Burt | DeltaTerra Capital

“A lot of real estate is massively overpriced and there’s a lot of risk associated with that and the big risk is another foreclosure crisis,” Burt added. “Now, it’s a very different dynamic that’s creating the mis-pricing but actually magnitude-wise it looks pretty similar, maybe even bigger.”

Burt was an investing consultant at Cornwall Capital in the run up to the financial crisis, one of the firms that successful bet against the housing market. Cornwall Capital was profiled in the book, The Big Short: Inside the Doomsday Machine, and his colleague from the firm was portrayed by Bradd Pitt in the film adaptation.

The emerging luxury consumer is different. Here’s what you need to know What does the emerging luxury consumer value? How real estate agents can adapt to the unique needs of the new buyer READ MORE

Burt’s position was first published by Reuters in September. He recently started DeltaTerra Capital, a firm that helps clients manage the risks of climate change. DeltaTerra Capital, according to Reuters, is currently targeting mortgage-backed securities with exposure to areas prone to the impacts of climate change like Texas or Florida.

“The market’s failure to integrate climate science with investment analysis has created a mispricing phenomenon that is possibly larger than the mortgage credit bubble of the mid-2000s,” Burt wrote in a presentation to prospective clients, obtained by Reuters.

Attom Data Solutions’ most recent Natural Hazard Housing Risk, published in September 2018, actually found that prices were appreciating at a much higher rate in cities at the greatest risk of being impacted by natural disasters. The study found that home price appreciation in highest-risk natural hazard cities was 1.7 times the overall market rate over last decade, in 2018.

Foreclosure risk was also higher in more flood-prone areas, according to the study.

Homeowners themselves are still slow to make changes, based on climate change. Less than half of homeowners are worried about climate change, according to a recent study from Value Penguin and only forty-two percent of homeowners say they’re unwilling to pay higher insurance costs.

Email Patrick Kearns

Source: click here

Read More

INSPIRED, INTELLIGENT, INSIGHTFULL

STAY INFORMED WITH TIMELY AND INTERESTING ARTICLES FROM OUR BLOG, MISSION CHRONICLE. OUR ASPIRATION IS TO PROVIDE REALTORS AND OTHER REAL ESTATE INDUSTRY PROFESSIONALS WITH EXCEPTIONAL RESOURCES AND SHARE OUR KNOWLEDGE TO PROPEL YOU TO YOUR GOALS.

  • Mission Chronicle Newsletter July 24, 2023

    Mortgage rates continued to press downward last week after the previous week's CPI data pointed to e...

  • Mission Chronicle Newsletter Feb 20, 2023

    Despite the recent downward trend in mortgage rates and hopes that the Fed was nearing the end of it...

  • Mission Chronicle Newsletter Feb 6, 2023

    The Federal Reserve meeting ended as market participants expected, with a quarter-point increase and...

  • Mission Chronicle Newsletter Dec 26, 2022

    Mortgage rates held relatively steady last week as most economic news came in better than expected.C...

  • Mission Chronicle Newsletter Dec 12, 2022

    Rates managed to move slightly downward last week as recession fears grew amid hopes that the Fedis ...

  • Mission Chronicle Newsletter Dec 5th 2022

    Mission Chronicle Newsletter Dec 5th 2022. Platforms: Browser, mobile-responsiveIdeal for: Leasing a...

  • Inman Review: Tenants and leasing teams get better connected with RentTango

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • Tech Review: Smart Alto puts people first in its innovative lead qualification solution

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • Refreshed and nurture-savvy, Market Leader’s CRM deserves your attention

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • The top 4 tips to improve your negotiation skills

    In today’s luxury real estate market, strong negotiation skills are an asset—you might even say ...

June 2024
Mon Tue Wed Thu Fri Sat Sun
 12
3456789
10111213141516
17181920212223
24252627282930

  • Polls

    What information you are looking for?

    View Results

    Loading ... Loading ...
  • Last month Results

    How Is My Site?

    • Good (100%, 3 Votes)
    • Excellent (0%, 0 Votes)
    • Bad (0%, 0 Votes)
    • Can Be Improved (0%, 0 Votes)
    • No Comments (0%, 0 Votes)

    Total Voters: 3

    Vote

    Loading ... Loading ...