Why Did the Housing Market Collapse in 2008 and Could it Happen Again?

by | Jun 25, 2018 | Legal Tips

Last week I flew the family out to the Grand Canyon for vacation. I had forgotten to download the latest episodes of Westworld so I was left looking for something to watch on the airline’s entertainment system. I came across a movie that my law partner had recommended some time ago. The movie, The Big Short starring Christian Bale, Brad Pitt, Steve Carell and others, is the story of Wall Street Investor, Michael Burry, and how he figured out that subprime home loans were in danger of massive defaults and if the defaults occurred the economy would collapse. The movie examined why the collapse occurred, how Burry figured it out before anyone else as well as the massive fraud that was committed by lenders, banks and credit rating companies trying to keep the inevitable from occurring.  The reason I am writing about this movie in this blog is I believe everyone in real estate should spend 2 hours and watch the movie. Besides being extremely entertaining, the movie explains in very plain spoken terms how the housing market collapsed and ends with the question, could it happen again? It is important to understand the dangers in your market as well as to be able to answer intelligently when a client asks questions about the housing market and past issues.

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