Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Shmuel has over two decades of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. Shmuel provides a uniquely holistic approach to comprehensive real estate and financial matters that goes well beyond any single transaction. Shmuel is an award-winning financier recognized for maximizing the short-term and long-term objectives of his client. As a contributing writer to many local and regional newspapers and publications, his insights have been featured in the media for many topics, including mortgages, personal finance, appraisals, and real estate trends.

There are a few events in a person’s life that will forever be etched in their memory. They will know exactly where they were at that very moment in history, who they were with, and what they were thinking. One such recollection for me is 9-11. I remember the people in my office gathering around my computer to see the latest news regarding the towers. Another such moment for me was July 2007 when Bear Stearns, the Wall Street juggernaut reported that two of their core subprime hedge-funds had lost nearly all of their value due to the severe decline in the market for subprime mortgages. Economist Mark Zandi wrote that this 2007 event was “arguably the proximate catalyst” for the financial market disorder that followed. I completely agree, and predicted the same at the time.

That was a decade ago this month. So much has happened over these past ten years… fortunes erased, corporations vanished, lives ruined, markets forever altered. When the movie, “The Big Short” came out about the financial crisis and US housing crash, my friends asked me what I thought of it. I told them I didn’t enjoy living through it in real time, and flashes of it on the big screen made my stomach turn once again. It was a very unsettling time to say the least, and I know of too many nightmares that some people are still suffering-from as a result of the catastrophe. I am still unsure as to whom the movie was trying to depict as the cause of the disasters, but I think it’s fair to say that everyone had a little blood of guilt on their hands. My opinions and accounts of that time are too personal and lengthy to discuss in this venue, but I did want to acknowledge that it is the unofficial 10-year anniversary of the crisis.

So now a decade later, where do we stand?! I guess one can say the economy is “booming”. Quantify it any way you want, most market gauges are at historical and record proportions. The stock market including the Dow, S&P, and Nasdaq seem to be breaking records every few trading sessions. “Corporate earnings” appear to be exceeding market predictions and forecasts with each passing quarter, showing resilience and growth in business. “Consumer Confidence,” a measure of US consumer optimism is at 15 year highs, as Americans express continued satisfaction in current and future economic conditions. The CBOE “Volatility Index” (the “VIX”), considered the best gauge of “fear” in the market, dropped to its historical lowest levels ever, since the index began publishing real-time data in the early 1990s. The market seems content with the actions of the Fed and the reaction of the economy to it. Similarly, all aspects of the real estate market are thriving. A recent report from the NAR shows that homes are selling faster than any time in recorded history, dipping below 30 days “on market” for the first time in history. In another report, news recently broke that homes have never been more valuable than they are now – exceeding the national average of price/value ever. Globally, home prices are also at historical levels, although the US does not lead the crowd – trailing New Zealand, Australia, Britain, and Canada whose real estate markets are thriving.

All that said, I believe the market exuberance should be taken with a grain of caution. I pride myself on being a optimistic and hopeful person, but from my vantage point “Main Street” is not as cheerful and certainly not as flourishing. Regular people are still mired in serious debt; salaries are still below inflation and cost-of-living surges; homes are becoming unaffordable and difficult to obtain; life-events continue to escalate at disproportionate levels, and spending is at all-time highs. Something is off. I hope I am wrong. I assume I am wrong. A few weeks ago, Federal Reserve Vice Chairman Stanley Fischer said a long period of low interest rates may have contributed to “high and rising” home prices in several countries, cautioning against forgetting the lessons of the 2007-09 housing crisis. “The world as we know it cannot afford another pair of crises of the magnitude of the Great Recession and the Global Financial Crisis.” As we all know, those who fail to learn from history are doomed to repeat it – I hope this is a lesson we don’t need to repeat.

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