I agree. I’ve worked in residential real estate for a long time. Commercial real estate and residential real estate are two different animals. So much so that they have non-corollary market cycles. Don’t get me wrong, residential has slowed significantly and could take a serious dive in the near future, but Jack missed the mark with this one.
Discussion
C&I is non real estate altogether. Maybe a piece of owner occupied real estate gets thrown into the structure, but this A/R, inventory, and equipment lending for businesses, and those cycles are definitely non-corollary. I wasn’t sure if there was a deeper insight here I was missing.
Wow, I assumed this was real estate since OP mentioned the housing market. Thanks for educating me.
Now I can see how one might jump to the conclusion that if lending on C&I goes down that means business is slowing, then people loose their jobs and eventually their homes? It’s a reasonable assumption.
I have found that while that seems intuitive, that’s not reality. We’ve also never had interest rates this high for such a long time, and it’s hard to tell what factors even correlate to each other anyways. I was genuinely curious as to what Jack’s thought process here was.