billionaire Real estate developer J-Bloom warned consumers on Thursday that the housing industry was hit by a “perfect storm.”
“We are in the midst of a real estate boom like never before,” Bloom said. “Kavuto: From coast to coast.”
He said several different factors influence homebuilding in the bright red housing market – Supply chain interruption Low interest rates during a pandemic and the “foreclosure moratorium”.
“$ 12 lumber is now $ 80 to $ 100 … Now interest rates are starting to rise rapidly,” Bloom explained. “We can see that the foreclosure moratorium is starting to break and the supply chain is starting to fix.”
He said the “perfect storm” would “eliminate” the anthropogenic shortage of inventories in the housing market, resulting in “starting new homes” and putting pressure on pricing.
Bloom pointed out that supply chain disruptions and labor shortages have made it difficult to obtain materials and find workers, reducing confidence in housing construction.
“The materials you get are very expensive compared to what they have historically taken,” he explained.
“I can’t find a plumber, an electrician, or an HVAC service person … Building a house is very expensive, and as a result, builders are building a house less often.”
Billionaire real estate developers emphasize that these factors are “boosting the value of existing home inventories” and do not understand how they are “sustainable.”
“I think the momentum will slow down and I think it will be a complete reversal,” Bloom concludes.
“The problem is the affordability of homes. Rents are rising because the value of real estate has risen to unsustainable levels. People can’t afford homes.”