How Excess Liquidity Contributes to Real Estate Recessions

How Excess Liquidity Contributes to Real Estate Recessions

Is there a connection between excess liquidity and real estate recessions? In this video, Scott Choppin, Urban Pacific Founder and CEO lays out how these two are connected.

Remember in 2005-2006, we had these really high, progressive ARM mortgages on single-family homes, and you could get in for nothing down, or put up one percent. Those would be examples of that. That was a signal that there was too much capital flooding into the marketplace, and although you couldn't, as a developer, or investor, understand all the permutations of it ... Of course, we look at in hindsight, it's now obvious, right? What it was doing is it was artificially propping up or expanding the single-family and the for-sale housing market in that later part of the 2003 to 2006 era.

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