Barry Habib, the founder and CEO of MBS Highway, says the hottest real estate markets in the United States have something unique in common. “I don’t know what the reason is on this,” says Habib, “but wherever marijuana is legal, all of those markets are on fire… it’s Seattle, it’s Portland, it’s Denver—these are the hottest markets!”
In a wide-ranging interview with RiskHedge’s Jonathan Roth, Habib also addresses the impact he believes a rumored interest rate hike later this month will have on the US real estate market.
“When you look at the overall environment, the levels of inventory are so darn low,” explains Habib. “We hear it everywhere—I speak around the country; my finger is really on the pulse—the biggest complaint is such low inventory. And, at the same time, the demand is very high.”
Recently awarded the Crystal Ball Award by Zillow for his accurate real estate forecasting record, Habib isn’t shy about discussing ideas that have yet to hit the mainstream. Despite the market’s anticipation that interest rates will slowly rise over time, in the interview, Habib lays out a realistic scenario where rates could actually decline.
“If the Fed becomes overly aggressive in hiking rates… and they start to drain money out of the stock market, interest rates could actually decline,” says Habib. “If they’re perceived to be really combatting inflation to where inflation moves a bit lower, interest rates could actually—as crazy as it sounds—decline in an environment where the Fed is hiking and where they’re either close to the curve or ahead of the curve.”
Despite many observers seeing President Trump moving the Federal Reserve in a more hawkish direction, Habib isn’t convinced.
“It’s interesting with Trump because sometimes he tends to be the Trump who gets things riled up and talks about how critical he’s been of the Fed,” explains Habib. “But then as President, maybe it’s not in his legacy’s best interest to be the President that appoints such a hawkish voting Fed group that they really take the punch bowl away, perhaps a little too early, on the stock market.”
Watch the full interview above for all of Habib’s insights.