Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
China Hang Seng Stocks Index Collapses and Commodities - 24th May 19
Costco Corp. (COST): Finding Opportunity in Five Minutes or Less - 24th May 19
How Free Bets Have Impacted the Online Casino Industry - 24th May 19
This Ultimate Formula Will Help You Avoid Dividend Cutting Stocks - 24th May 19
Benefits of a Lottery Online Account - 24th May 19
Technical Analyst: Gold Price Weakness Should Be Short Term - 24th May 19
Silver Price Looking Weaker than Gold - 24th May 19
Nigel Farage's Brexit Party EU Elections Seats Results Forecast - 24th May 19
Powerful Signal from Gold GDX - 24th May 19
Eye Opening Currency Charts – Why Precious Metals Are Falling - 23rd May 19
Netflix Has 175 Days Left to Pull Off a Miracle… or It’s All Over - 23rd May 19
Capitalism Works, Ravenous Capitalism Doesn’t - 23rd May 19
The Euro Is Bidding Its Time: A Reversal at Hand? - 23rd May 19
Gold Demand Rose 7% in Q1 2019. A Launching Pad Higher for Gold? - 23rd May 19
Global Economic Tensions Translate Into Oil Price Volatility - 22nd May 19
The Coming Pension Crisis Is So Big That It’s a Problem for Everyone - 22nd May 19
Crude Oil, Hot Stocks, and Currencies – Markets III - 22nd May 19
The No.1 Energy Stock for 2019 - 22nd May 19
Brexit Party and Lib-Dems Pull Further Away from Labour and Tories in Latest Opinion Polls - 22nd May 19
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

U.S. House Prices Soaring, Housing Bull Market Momentum Reaches Boom Times

Housing-Market / US Housing Aug 15, 2013 - 02:08 PM GMT

By: Nadeem_Walayat

Housing-Market

Prospective U.S. Home buyers who may have been persuaded by skeptical journalists that populate the mainstream financial press of the sustainability of the rise in house prices will by now be increasingly finding themselves in an panicky state as US house prices have literally started to soar during the past few months, as illustrated by the Case Shiller house prices index for the most recent month of May showing a jump of 7% over just the past 6 months.


The graph for long-term US housing prices shows that prices are now rising at an annualised rate of over 12% which now puts the momentum for house prices firmly into strong bull market territory, in fact a goldilocks state that in my opinion could be sustained for many years, never mind months (i.e. a rate of about 12% per annum is sustainable). However any further increase in momentum and then that would result in a the housing market overheating thus warranting a correction.

As also illustrated by the graph, the US housing market has some way to go to reach the point of a bubble peak, which means home buyers should take all of the commentary of this bull market not being sustainable, and for an imminent end, from clueless academic economists, financial commentary salesmen, and worse journalists who think they are clueless economists, with a house size pinch of salt, for they never saw this bull market coming in the first place and will likely only turn bullish just before the trend ends, as was the case towards the end of the last US housing bubble market.

As an example, here is what Peter Schiff wrote for Forbes over four months ago -

Great Reflation Produces Mirage Of Recovery In Housing

By Peter Schiff - concluding -

Of course the real risks in housing center on the next leg down, in what I believe will be a continuation of the real estate crash. We can’t afford to artificially support the market indefinitely. When significantly higher interest rates eventually arrive, the fragile market will again be impacted. We saw that movie about five years ago. Do we really want to see it again?

U.S. House Prices Forecast

My in-depth analysis and concluding trend forecast of January (12 Jan 2013 - U.S. Housing Real Estate Market House Prices Trend Forecast 2013 to 2016), based on the latest data available at the time concluded in a detailed trend forecast for the US house prices to target a rise of 30% by early 2016 as illustrated by the original graph below, which followed a years warnings to prepare for the birth of new housing bull markets for the UK and US as I repeatedly iterated during 2012 as being the year of the embryonic bull markets that have morphed into bull markets proper for both countries during 2013.

US House Prices Forecast 2013 to 2016

US House Prices Forecast Conclusion - As you read this, the embryonic nominal bull market of 2012 is morphing into a real terms bull market of 2013, with each subsequent year expected to result in an accelerating multi-year trend that will likely see average prices rise by over 30% by early 2016, which translates into a precise house prices forecast based on the most recent Case-Shiller House Price Index (CSXR) of 158.8 (Oct 2012 - released 26th Dec 2012) targeting a rise to 207 by early 2016 (+30.4%).

This analysis was also accompanied by a youtube video version.

08 Sep 2012 - UK Home Extension Planning Rules Relaxed to Boost Economy, Trigger Housing Bull Market

I am continuing to see positive signs towards a multi-year bull market, so I am giving you another head start on an emerging probable multi-year bull market in UK housing.

An updated graph for the case shiller US house prices index shows that the US house prices are now soaring, clearly this parabolic trajectory is NOT sustainable, so I am expecting the pace of US house prices growth to moderate over the coming months to oscillate around my expected trend trajectory. Still this should act as a warning shot across the bows of all those who are WAITING to buy, as such indecisiveness could prove very costly!

In conclusion, whilst it is still easy today to find much bearish rhetoric in the mainstream media of why the bull run in house prices is unsustainable, however you have to understand that the market is NOT driven by fundamentals but by SENTIMENT and it is SENTIMENT that CREATES the fundamentals! Which is why the academic economists NEVER have any real clue of what is going in the markets because they are ALWAYS LOOKING in the WRONG direction! i.e. they are looking at the CAUSE rather than the EFFECT, as the EFFECT makes itself manifest in the price charts long before the CAUSE appears in the economic data that academics focus upon.

UK Housing Bull Market

I have similar expectations for the UK housing market as that of the US, and likewise UK house prices have also started to soar over the past few months, for which I will do a far more in-depth momentum analysis during the weekend as the UK is the primary housing market that I am most exposed to (60% of assets) - Free Newsletter.

Ensure you are subscribed to my always free newsletter to get my next in-depth analysis of the housing markets in your email in box.

Source and Comments: http://www.marketoracle.co.uk/Article41871.html

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2013 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of four ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series.that can be downloaded for Free.

The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 600 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

radthelad
18 Aug 13, 18:11
Housing boom

Nadeem

Ifeel you are right regarding the hosuing inflation being recklessly stoked up by TPTB. One questi I have, taking into account your advice, is how would a person capitalize on this if they are (semi) retired without a salary (effectively blocked from the mortgatge market) who needs cash flow (even if drawing down on savings) in order to live.

Your thoughts


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules