Announcer:
4 Your Money is brought to you by NelsonCorp Wealth Management.
Brandy Auterson-Hurst:
It’s now time for 4 Your Money. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. Welcome back, David.
David Nelson:
Thank you. Pleasure to be here.
Brandy Auterson-Hurst:
All right. It seems that there continues to be a lot of concerns about commercial real estate, and specifically office buildings. Is that something viewers should be paying attention to?
David Nelson:
Well, anytime we go through a credit cycle like we’re in right now that seems to be getting long in the tooth, we pay close attention to certain models and some of those leading indicators that come into play, as far as periods of time like now, basically set around defaults and delinquencies. And the chart that I have today is basically going to look at that and it’s looking over the ten-year period of time here. And what we can see, if you look at the left, that’s 2014. We’re essentially in 2014 coming out of the great financial crisis and things were a little elevated. These are, again, delinquencies, defaults, looking at loans. Then it dropped nicely and then we saw a little spike as far as during COVID.
And now what we see in the tail end on the far right over there is that things are actually popping up again. Not necessarily what we want to see, but it’s still basically a 1% or below number, which historically is a pretty good number. But again, this is the type of thing. Maybe this is a trend. Maybe this is going to continue for a period of time.
Brandy Auterson-Hurst:
All right, so what do you think this says about the economy and markets?
David Nelson:
Well, for us, it’s an early warning sign. And I think for individuals out there, they should be paying attention to this as well. Again, one of our goals/objectives with this type of venue, as far as coming on here, is basically to try to make people aware of what could be coming down the road and keeping people current. We’ll certainly keep an eye on this thing because this is a big item if and when this thing starts moving above 1%.
Brandy Auterson-Hurst:
If you missed any of our discussion, we’ll make it available for you on ourquadcities.com.