Afford Anything Podcast
Host: Paula Pant
Episode: Radical Transparency in Real Estate Predictions
Date: October 21, 2025

Episode Overview

In a rare act of "radical transparency," Paula Pant revisits a conversation she had in August 2023 with Scott Trench—then CEO of BiggerPockets—where they discussed the real estate market’s outlook for the next two years. This episode plays back their predictions and scrutinizes which forecasts held up, which missed the mark, and how investors can learn by regularly reviewing their own past hypotheses. The discussion covers macro and micro housing trends, demographic shifts, interest rates, supply constraints, and practical investment strategies.

Key Discussion Points & Insights

1. Why Financial Predictions Rarely Age Well – and This Episode’s Uniqueness

[00:00-04:24]

• Paula notes how financial media often makes bold predictions, but almost never revisits them for accountability.
• The episode’s purpose: to hold herself and Scott accountable by listening back to their real estate forecasts made in August 2023 and evaluating their accuracy with the benefit of hindsight.
• "We're going to do something that, frankly, almost no one in financial media ever does. We're holding ourselves accountable." – Paula Pant [02:00]

Tone: Reflective, candid, and slightly irreverent toward traditional financial punditry.

2. State of the Real Estate Market in August 2023

[04:24-13:08]

Key Points Discussed:

• Surprising market resilience: Despite interest rates doubling, home prices remained strong due to the "lock-in effect"—owners with low-rate mortgages reluctant to sell.
• Builders thrived, contrary to expectations, because they faced little competition from existing home sales.
• Flippers saw price drops for fixer-uppers, reflecting buyer reluctance to take on renovation risk/costs.
• National trends masked huge local variation: Markets like Boise plummeted (~20% down YoY), while others (e.g., Rochester) saw stability.

Notable Quote:

• "There's this 'old joke' on Wall Street that analysts have successfully predicted 20 of the last two recessions..." – Paula [01:40]
• "The big part of that story is what we call the lock-in effect…homeowners…can't move…because you're giving up this low locked-in mortgage rate." – Scott Trench [04:54]

3. Interest Rates, Housing Supply, and Migration Patterns

[13:08-23:29]

Key Points:

• Despite long-term underbuilding, a record number of new units (particularly multifamily in the Sun Belt and West) were under construction.
• Decades-long zoning barriers (e.g., single-family-only zoning) continued to stymie densification in major cities.
• Shortages of skilled trades and cyclical booms/busts in construction labor worsen supply problems.
• Migration trends, especially post-COVID, drove regional market disparities (e.g., Denver net out-migration despite recent surges).

Notable Quote:

• "It's a two- or three-year lag…you didn't start that last month…you started three, four, five years ago, maybe a decade ago." – Scott [14:49]
• "Most parts of most cities are zoned for single-family only…no one wants more housing in their backyard." – Scott [16:03]

4. Investment Strategy: How Buyers Should Think—Macro to Micro

[23:29-26:29]

Key Points:

• Investment decisions start macro (asset class, region) and move to micro (specific deal analysis).
• Stock market performance in 2023 was bifurcated: up overall, but driven mostly by large tech companies; excluding those, the broader market was flat or down.
• Real estate’s illiquidity and leverage remain its strengths in a high-rate environment.
• Buyers were advised to zoom in on local supply/demand dynamics before purchasing.

Notable Quote:

• "Once I've made that determination…now I pick those markets. Kansas City, I like Kansas City." – Scott [25:49]

5. October 2025: Hindsight Analysis of Predictions

[28:12-38:24]

Key Points:

• Lock-in effect still persists, though slightly less as mortgage rates dropped from 7-8% (2023) to 6.3% (2025).
• Market activity (transactions) is historically low—2025 is on track for the fewest home sales since 1995.
• Home prices have essentially kept pace with inflation; no crash, no spike.
• New construction provided some relief but didn’t eliminate the supply crunch; average days-on-market has increased.
• Builders with access to capital could offer mortgage rate incentives, giving them an edge over resellers.
• Tariffs and materials costs emerged as new challenges in 2025.

Notable Quote:

• "It is an amazing buyer's market right now. If you are in a position to be a buyer, this is the time to buy." – Paula [31:34]

6. Practical Market Selection: Cash Flow Versus Appreciation

[38:24-47:16]

Key Points:

• Cash flow or appreciation? Scott recommends basing market choice on personal goals and risk profile.
• Long-distance investing is viable, but having local knowledge is a persistent advantage, especially in turbulent times.
• Northeast and Midwest markets offered more stability (and sometimes outperformed) due to lower inventory and little overbuilding.
• Rent growth predictions remain highly uncertain; local supply (especially new multifamily builds) is critical.
• Private lending and debt instruments became attractive alternatives in a high-interest rate world.

Notable Quotes:

• "Cash flow, appreciation, or both? There’s nothing that offers everything all at once, but you can get a blend…" – Scott [39:02]
• "Have a long-term outlook. Buy an asset you’re gonna hold for a long period of time—because this is anybody’s guess and there’s going to be volatility…" – Scott [45:44]

7. The Regional Picture: Sun Belt, Northeast, Midwest in 2025

[52:25-56:01]

Key Points:

• The South/Sun Belt still dominates supply and new construction activity.
• Northeast and Midwest remained inventory-constrained, driving price appreciation and relative market stability.
• Migration flows slowed, but net winners/losers stayed consistent (Sun Belt and Mountain states: winners; California, NY, Illinois: losers, albeit at a slower pace).
• Midwest began to show net-positive migration—a possible sign of future growth.

8. Multifamily vs. Single-Family: Asset-Class Performance

[56:01-59:00]

Key Points:

• Scott remained “relatively bearish” on big multifamily but saw more resilience in single-family and small multifamily (duplex, triplex, fourplex).
• National Association of Home Builders’ 2025 survey: Multifamily developer confidence slightly increased YoY, especially for garden/low-rise/subsidized units, less so for high-rise.
• Anticipated multifamily slump (due to oversupply, rising rates) is now, in retrospect, less severe than feared.

Notable Quote:

• “I waffle between thinking that small multifamily and single-family rental real estate is either the best asset to invest in or the least bad asset to invest in…with a long time horizon.” – Scott [57:27]

9. The Big Lesson: Radical Transparency and Retrospective Analysis

[59:00-end]

Key Points:

• Paula champions the idea that genuine investors and experts should periodically revisit their past statements and hypotheses.
• Financial education is better served by honesty about missed targets and ongoing uncertainty, not by bravado.
• Encourages listeners (and students in her course) to “play the tape,” review old analyses, and learn from both hits and misses.
• Ending encouragement to join her real estate course, emphasizing collaboration and accountability for new investors.

Notable Quote:

• “When your information becomes more complete…[it’s] a very educational exercise to look back on what we previously thought and reassess our thinking in light of new information.” – Paula [59:09]
• “If the financial media was truly dedicated to financial education and not just financial showmanship, they should do exercises like this more.” – Paula [62:59]

Timestamps for Noteworthy Segments

• 00:00-04:24 Radical Transparency intro, premise of this episode
• 04:24-13:08 2023 market snapshot: lock-in effect explained
• 14:21-18:24 Housing supply, construction cycles, and migration patterns
• 26:29-28:12 Macro-to-micro investing; asset class comparisons in 2023
• 28:12-38:24 October 2025 hindsight: What changed, what didn’t
• 38:24-47:16 Market selection and practical investing strategies
• 52:25-56:01 2025 Regional report: South/Sun Belt vs. Northeast/Midwest
• 56:01-59:00 Multifamily vs. single-family, survey data (2025)
• 59:00-end The learning value of retrospective analysis

Memorable Moments & Quotes

• “Analysts have successfully predicted 20 of the last two recessions…” – Paula [01:40]
• “The lock-in effect…is keeping prices high.” – Scott [04:54]
• “Buy an asset…you’re going to hold on to for a long period of time, because this is anybody’s guess…” – Scott [45:44]
• “It is an amazing buyer's market right now…if you are a seller, I'm very sorry…” – Paula [31:34]
• “I waffle between thinking that small multifamily and single-family is either the best or the least bad asset to invest in…” – Scott [57:27]
• “If the financial media was truly dedicated to financial education and not just financial showmanship, they should do exercises like this more.” – Paula [62:59]

Takeaways for Listeners

• Markets are hyperlocal—national statistics mislead without granular understanding.
• Supply constraints from both policy and labor cycles are key drivers of long-term price appreciation.
• Interest rates, while critical, do not dictate prices in isolation—demographics and entrenched homeowner behavior can neutralize rate shocks.
• Boring is good: Stable Midwestern and Northeastern markets provided more reliable performance between 2023–2025 than the volatility of Sun Belt “boom towns.”
• Self-review is powerful: Investors (and media) should regularly revisit and analyze their own predictions. Humility and learning matter more than bravado.

For Those Considering Investing

• Prioritize local analysis; national trends are only the backdrop.
• Think long-term; volatility will happen, but time in the market usually beats timing the market.
• Pay attention to new supply—especially multifamily starts—in your chosen market.
• The ability to secure and control operational details (contractors, property managers) is a hidden advantage of investing closer to home or somewhere familiar.

Episode in a Sentence:
Paula Pant and Scott Trench practice real accountability by dissecting their 2023 real estate predictions with 2025’s hindsight—offering listeners an honest, educational look into which forecasts held, where they missed, and why humility and steady strategy trump market bravado.

[End of Summary]