Contrarian Theory on the Cause of the Housing Boom and Bust with Kevin Erdmann

In this episode, I brought in Kevin Erdmann to talk about contrarian theory on the cause of the housing boom and bust. Kevin was a small business owner for 17 years and in 2010 he sold his business and earned his Master’s Degree in Finance from the University of Arizona which allowed him to get grounded in real-world experience in investing within the rigor of the Academy.Since 2013, he has blogged about his contrary observations on investment strategies and research. He is a visiting fellow at the Mercatus Center at George Mason University, where he and I connected through a mutual connection. He is currently engaged in two book projects with Mercatus on Housing Finance, land use restrictions, and monetary policy. His first book, Shut Out (Rowman & Littlefield, 2019), offers a contrarian theory on the cause of the housing boom and bust.[00:01 – 04:03] Opening SegmentI welcome our guest for the episode, Kevin ErdmannKevin Erdmann talks about his backgroundHis business and how he eventually found his way back to school[04:04 – 21:23] The Mercatus CenterHow Kevin found his way to The Mercatus CenterHis work and focusKevin talks about his researchReferencing to the film The Big ShortVarious sections of the country affected by The recessionCalculating residential investmentsThe regulatory bodies responsible for encouraging/allowing developersThe real difference between coastal cities and the rest of the country[21:24 – 51:16] The eventual cause of The Great RecessionExtreme difference between various types of cities in the countryRise of rent rates just about everywhere across the countryRelative pricing differential in different types of neighborhoodsThe most effective way to increase the price to rent ratio on a houseCause of a structural failure in the housing market in The Great RecessionFactors of migration in each cityThe rate of Homeownership pre and post-crisisRates of each age group of homeownersPredatory lending and unequal access to credit[51:17 – 1:01:35] Closing SegmentA fix for The Housing Shortage/ProblemWhat the housing market has createdConnect with Kevin. See Links Below.Final wordsTweetable Quotes:“There’s a real difference between coastal cities and the rest of the country. It’s almost like you have to go to those cities and experience it to really get a sort of feeling for it, how difficult it is to get from an idea to building something around half the size you wanted.” - Kevin Erdmann“I think across the country, we need to make sure we turn a corner and find ways to make it easier for multi-unit to be a building choice.” - Kevin Erdmann“Quantitatively, the most effective way to increase the price to rent ratio on a house, paradoxically is to increase its rent.” - Kevin Erdmann Resources Mentioned: Shut Out - Kevin ErdmannMercatus Center------------------------------------------------------------------------------Connect with Kevin, follow him on LinkedIn. Check out his content/articles and guestings at https://www.mercatus.org/scholars/kevin-erdmann Connect with Excelsior GP:Excelsior GP WebsiteLinkedInYouTubeConnect with me:LinkedInLIKE, SUBSCRIBE, AND LEAVE US  A REVIEW on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on. Thank you for tuning in and Stay Tuned for the Next Episode COMING SOON! Hosted on Acast. See acast.com/privacy for more information.