COVER STORY
BRUCE & AARON NORRIS
THE CHANGING FACE OF HOUSING
to him to provide the information as well as the outlook so that people could review those charts on their own and come up with their own solutions and thought processes. It was my job to produce the books and the presentation so he could be free to really educate and inform. It was a huge project and a team effort for sure.” Bruce remembers the project fondly as well. “When Aaron came to work for the company and created the California Crash document, it was lights out,” he said proudly. “It was an unbelievable looking document. When the audience opened it, there were audible gasps. It was great. It looked like a Goldman Sachs presentation, and it was the start of a really effective outreach into the industry.” Today, the father and son continue to work closely to develop new educational materials for real estate investors. Their focus remains on informing the industry. TNG places high priority on keeping real estate investing accessible and actionable for industry participants at all levels, from the experienced investor with plenty of capital to work with to the new investor just getting started. “You will always have people who want to just basically be told what to do,” observed Aaron, noting that his father steadfastly refuses to do this. “We actually held back the last three chapters of our February 2017 presentation and shrink- wrapped them so that people could not skip to the predictions,” he laughed. “We had a 250-page book, 400 charts, and 3 shrink-wrapped chapters that you could not get to until the final break before the end of the presentation.” “I want people to understand the process, to know how I get to my conclusions,” explained Bruce simply. “For example, in 2011, I thought I might just want MORE THAN A FEELING: MEANINGFUL METHODOLOGY
no good,” he said. Fortunately for the real estate industry, Bruce and Aaron Norris’ skill sets are perfectly aligned and perennially suited for a long future in investing and forecasting. •
to liquidate everything I had and find something else to do, to be honest with you. A little bit prior to that, I’d written a seminar called ‘All In or Fold,’ and I was thinking about folding. Ultimately, I decided to go all-in. More recently I transferred a great deal of my wealth to Florida not because I was afraid California was going to go down, but because I could get two pieces of brand- new inventory for every one house I was holding in California. “It had nothing to do with bad timing or good timing in California, and everything to do with good timing in Florida. If you just read my predictions or just copied what I did, that tactic might not have been the right thing for you. That’s why I want people to understand what I’m looking at and what it means to them.” PROBABLYTHE HARDESTTHINGTODO IS STOPWHATYOU’RE DOINGWHENYOU’RE HAVINGTHETIME OF YOUR LIFE. THAT’SWHY I NEEDTHE CHARTS.” - BRUCE NORRIS Aaron added, “Charts are not academic for my father. He knows what they feel like because he’s lived them. That’s why our work together is real, practical, and makes sense. I worry about design; he educates and helps people make and save millions of dollars.” “Probably the hardest thing to do is stop what you’re doing when you’re having the time of your life. That’s why I need the charts,” observed Bruce. “I was having the time of my life in 2006, but I liquidated anyway because the charts gave me the discipline to do it. The hardest thing in the
world is to do something different than what you are feeling while you are feeling it. My skill set is to see beyond the feeling, the success or the failure in a market, and find the methodology to see when to get out and when to get back in. “You can be a genius when the market needs your skill, but if you are doing the wrong thing at the wrong time, it’s
A aron Norris knows technology. It's undeniable that his company and its investors, clients, and followers have certainly benefited from his skills over the years. However, Norris does not just use technology to talk about real estate. He sees it in the very fabric of the future of real estate. “I’m fascinated by technology and how it might change the way we live. For example, Amazon Key is a technology that could change everything for real estate investors and also change the way we build and develop living spaces for ourselves in the future,” he said. Amazon Key presently is used in select cities to allow Amazon couriers to unlock customers’ doors for white-glove delivery, but the notion of a smart lock designed for landlords is no longer alien or even particularly groundbreaking. As technology continues to evolve, devices like Amazon Key could change the very definition of property ownership. In the future, "owners" might have far greater flexibility in terms of howmany places they consider home base. The shift could even extend to how they own and access physical properties and associated amenities. Norris noted this technology will dramatically impact living concepts like co-living, micro-apartments, and pod living, all new types of developments that may appeal to young, mobile- minded professionals who would like to own real estate but hesitate to be tied down to one geographic location. “A lot of people are starting to think about owning, but they want freedom in their lifestyle even if they are married or have a family,” he explained. “It’s not just the late Gen- Xers or even all the Millennials or Gen Z; it’s the seniors that are setting
Carole VanSickle Ellis is the editor of Think Realty Magazine. She can be reached at cellis@thinkrealty.com
EXCLUSIVE: TNG’S 2018 OUTLOOK
3. Lending over the past 8 years has been the most conserva- tive ever. Some 97.5% of the borrowers got a fixed rate loan that likely started with a 3% something interest rate. “What will be most interesting is if we do have signs of recession late 2018. The normal reaction to a reces- sion by the Fed is to reduce the fed fund rate by about 4%. If they hike four times in 2018, the fed fund rate will be just above 2%. Is it possible that the fed will reduce interest rates 4% to head off a recession? Yes, I be- lieve that’s possible. All the rate hikes you will see in 2018 I believe will be- gin to be reversed by the end of 2018 and the beginning of 2019. I believe that during the next recession, we will have a 30-year mortgage interest rate that starts with a two! The real estate industry will actually do very well during the next recession because of that – even if unemploy- ment goes significantly higher.” Learn more about The Norris Group at www.thenorrisgroup.com. Learn more about I Survived Real Estate at www.isurvivedrealestate.com.
" I see real estate having a decent year in 2018. I think The Fed will raise rates several times in an attempt to normalize interest rates. I believe this will ultimately lead to signs of a recession by the end of 2018. Since we are still close to historically low interest rates, the small increases in rates to a 30-year mortgage during 2018 will not crash the real estate market. The combination of tax law changes affecting real estate and the raising of rates should keep the lid on prices. I don’t expect a lot of price movement year over year. “There are three things that will prevent any significant price decline for real estate in the next downturn: 1. Prices have accelerated for the last six years. The owners of those homes have huge equity positions. 2. Unlike the past real estate boom, the owners have not ex- tracted their equity. That equity, by and large, is still intact. Bruce and Aaron Norris compiled this outlook for Think Realty Magazine readers. It is our privilege to print TNG’s forecast for the coming 12 months.
Aaron Norris believes technology will permanently change the face of housing over time.
new priorities in the market as well. “For a lot of people, the key to being homeowners is going to be in the ability to be mobile, to have flexibility. Technology could open up options that no one has ever had before.” Norris also believes real estate will play a key role in keeping things relational in the future when many other aspects of life are driving communities apart. “I’m doubling down on investments that build relationships, be that in marketing, development, or investing,” he said. “We aremakingmore phone calls now thanwe’ve evermade.We domore direct mail, more speaking. It holds true for real estate investing as well.Where I live, we have a calendar of all the things we have going on in the community: Food Truck Thursday, yoga classes, you name it.We all crave interacting, andmultifamily living is not going away but the idea of the amenities and features we expect may change. Technology will direct those changes.”
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