Episode Summary:
Craig and Jack discuss how the current real estate market mirrors the early stages of 2007–2011. Pulling from firsthand experience during the Great Recession, Jack explains why he believes we’re only in the early innings of a liquidity-tightening cycle — with 2024 resembling 2007 and 2025 resembling 2008. They break down investor psychology, rate cycles, liquidity, pent-up demand, and how long real estate corrections really take to materialize. They also share practical advice for flippers and real estate investors on pricing strategy, avoiding the “loss-aversion death spiral,” and how to stay liquid to capitalize on opportunities that may appear over the next 12 months.
Episode 102 Overview
Craig and Jack use this lightning episode to warn newer investors. Many of them have not lived through a down cycle. Craig remembers 2008–2012 clearly. Back then, deals were easy to find. You could make dozens of offers on REOs and win a few. However, selling those houses was the real challenge. Buyers did not trust the bottom. Prices kept drifting down. So flippers had to decide whether to set a new comp or price like the neighbor and move fast.
Jack adds that cycles do not break overnight. He started in 2007, right at the top. Yet 2007 still felt normal in real time. Prices held up because the crash moved slowly. After that, 2008 brought a darker mood and real price declines. Then 2009 and 2010 turned into a slog. Lending dried up. Buyers hesitated. Investors ran out of patience and cash. Only later, in 2011 and 2012, did the best buying opportunities appear. Jack says time caused the real damage. People kept going while hope stayed alive. Eventually, they capitulated when money and optimism finally ran out.
Liquidity Drives The Cycle
Both hosts frame the market through liquidity. They argue liquidity moves prices more than headlines do. When capital tightens, values fall. When capital loosens, values rise. Still, the impact shows up with a delay. Therefore, investors need to track liquidity trends, not just comps. Jack thinks the last crash proved that point. He believes the same dynamic is in play now.
Why Jack Feels 2025 Looks Like 2008
Jack says the rate-tightening cycle began in 2023. At first, people expected an instant drop. Yet supply stayed low in 2024, so prices held. The market felt thinner, but it kept moving. Now, late in 2025, Jack finally sees true stress. Investors feel higher costs and slower exits. Behavior is changing. Accordingly, he says 2024 resembled 2007 and 2025 resembles 2008. That framing shapes his real estate market cycle 2026 outlook. He expects a third year of tight liquidity. He also expects a consumer recession that weakens demand.
Rates Might Fall For The Wrong Reason
Craig asks if a new Fed chair in 2026 could lower rates and spark pent-up demand. Jack agrees demand is waiting. Even so, he thinks rates only fall because the economy slows. He doubts long-term bond investors will trust inflation control. So the 10-year yield may not drop much. And if recession fears drive yields down, lenders may widen spreads anyway. As a result, mortgage rates could fall less than people hope. Buyers may also stay cautious in a recession. Jack expects retail prices to stay flat at best. Meanwhile, wholesale and as-is prices may fall as investors pull back.
The Flipper Strategy: Cut Fast, Stay Liquid
Jack offers blunt advice for flippers and spec builders. Start near top comp if you want. Then watch the market closely. If you do not get enough showings in two weeks, drop price. Drop again if needed. He tells investors to ignore sunk costs. Instead, listen to buyer feedback and move inventory. He says the people who got crushed last cycle did not take their medicine. They held properties, hoping spring would save them. They bled cash slowly and missed better buys each year. Jack wants listeners to clear bad deals now. Afterward, they can “reload the gun” for stronger opportunities ahead.
Bottom Line
This episode delivers a cautious but tactical real estate market cycle 2026 outlook. The hosts do not predict a sudden cliff. They expect a slow grind driven by tight liquidity. Therefore, they want investors to protect cash, price unemotionally, and exit losers early. If they are right, the next 12 months could reward anyone who stays liquid while others run dry.
