You don’t need to be a professional economist to have concerns about the housing market. Everyone is trying to predict what will happen in 2024 with real estate. On a recent podcast of Real Estate Disruptors, Sean Terry, founder of the real estate investing company Flip2Freedom, predicts that a black swan event could rock the housing market in the next six to eight months.
What is a black swan event?
A black swan event is something that is unpredictable and rare. It comes from the notion that black swans are rare. According to Brittanica, the first reference to a black swan event came from Juvenal, a Roman poet who was born in the first century AD, when black thoughts weren’t thought to exist. It wasn’t until the 17th century that black swans were discovered in Australia. Juvenbal compared a woman with the worthy qualities of marriage to the “rare” black swan.
Today, black swan events are “paradigm shifting.” Although black swan events are considered unpredictable, they are often rationalized in hindsight. World War I, the September 11 attacks, and the dot-com bubble are often referred to as black swan events.
Could the market crash in 2024?
The 2008 financial crisis is also considered a black swan event, and some experts are comparing it to the current housing crisis. In 2008, banks foreclosed on thousands of houses, largely due to the subprime lending practices. There are concerns that the current impending recession, the high cost of homes and the cooling job market could combine to burst the bubble, so to speak.
“How do you make housing affordable? If you have to raise interest rates,” Terry said. “The prices have to come down. Something will crack, and I think…we’re gonna have a Black Swan event probably in the next six-eight months…that’s going to rock the markets.”
Search for “will the housing market crash in 2024” and you’ll get experts on both sides of the coin. The feds are trying to avoid a recession by raising interest rates to slow inflation. But there may be forces outside of their control.