Housing industry getting hit by 'perfect storm,' billionaire real estate developer warns
We're in the middle of a housing 'boom,' Jay Bloom tells 'Cavuto: Coast to Coast'
Billionaire real estate developer: We’re in the middle of a housing ‘boom’
Billionaire real estate developer Jay Bloom says the housing ‘boom’ is caused by supply chain interruptions, low-interest rates and ‘foreclosure moratorium’ due to the pandemic.
Billionaire real estate developer Jay Bloom warned consumers Thursday the housing industry is getting hit by the "perfect storm."
"We're in the middle of a real estate boom like we haven't seen in the past," Bloom told "Cavuto: Coast to Coast."
He said several different factors impact homebuilding in the red-hot housing market – from supply chain interruptions to low-interest rates and the "foreclosure moratorium" during the pandemic.
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"A $12 piece of lumber is now $80 to $100…now we're starting to see interest rates go up fast," Bloom explained. "We're seeing the foreclosure moratorium start to lift, and you're seeing the supply chain start to get fixed."
Billionaire real estate developer: House building confidence drops amid supply chain crisis
Billionaire real estate developer Jay Bloom provides insight into how the supply chain and labor shortage impact homebuilding.
He said once the "perfect storm" hits, the artificial shortage in the housing market inventory "goes away," and the result will be "new home starts," which will put down pressure on pricing.
Bloom noted that supply chain interruptions, along with labor shortages, are causing home-building confidence to drop since it’s difficult to get materials and find workers.
Billionaire real estate developer told FOX Business that we’re in the middle of a housing ‘boom.’ (iStock)
"The materials you get are extremely expensive, relative to what they historically cost," he explained.
"You can't find plumbers, electricians and HVAC service people…building a home has gotten extremely expensive, and as a result, builders are building fewer homes."
The billionaire real estate developer stressed these factors are "pushing up the value of existing home inventory," and he doesn’t see how it’s "sustainable."
"I think the momentum is going to slow, and I think there's going to be an outright reversal," Bloom concluded.
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"Housing affordability is an issue. We have rents that are going up because the property values are going up to the point where it's unsustainable. People can't afford housing."