Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Rising US Home Prices and Falling Sales

Housing-Market / US Housing Dec 08, 2018 - 07:39 PM GMT

By: Harry_Dent

Housing-Market Did you watch my video two Fridays ago? If not, check it out here. I explained how gold bugs are giving you dangerous advice about gold as an investment.

But gold isn’t the only investment that people mistakenly make because they’re told the wrong thing.

Real estate is another one.


In fact, I’d go as far as to say that buying real estate because its value “always goes up” is possibly even more dangerous than buying gold as a hedge during a deflationary season like the one we’re in now. That’s because housing becomes illiquid in the blink of an eye!

But, as usual, people get suckered into the real estate myth because they’re desperate to get something for nothing. They just don’t realize they’re about to be handed the bill…

In the last real estate bubble, we saw both rising demand and rising supply driven by ultra-strong demographics, falling interest rates, and ultra-liberal (a.k.a. idiotic) lending practices.

As I talked to you about recently, home sales and homebuilder stock prices peaked 26 months before stock prices did.

This time around we have a different scenario…

The Millennial demographics aren’t as strong as the Baby Boom and the environment doesn’t look as attractive for housing and appreciation prospects.

Plus, lending standards are tighter and mortgage rates have been rising since September 2017.

But there is something else going on…

Homebuilders have been much more conservative in building new homes. I’m not surprised after they got their asses whacked in the 2006 to 2012 bubble burst.

But to add insult to injury, older Baby Boomers are holding onto their homes for longer, which is exactly what I’d expect older people to do.

Both these things are limiting supply.

That’s caused prices to rise while mortgages are costing more.

This, in turn, has caused sales to fall…

There’s just not enough inventory of affordable homes.

Look at this chart. It shows something very interesting…



 The average tenure for homeowners before selling, from 2000 through mid-2009, was about 4.2 years (rangebound between 3.9 and 4.4).

Since then, that tenure has shot straight up into 2018. It’s now about twice as long, at 8.23 years…

Why?

The biggest part of this surge occurred between mid-2009 and mid-2012 when home prices were still scraping bottom, so it wasn’t the rising prices and appreciation that tempted buyers.

At first it was a better economy and existing households felt better about keeping their house. But by 2012 forward, it was simply the Baby Boomers aging and doing the predictable thing – not moving.

It’s no secret that younger households move much more than older ones. They’re seeking career opportunities and better neighborhoods for their kids. Us geriatrics don’t need to bother and the hassle of moving gives us the shits.

In 2009, the peak Boomers were 48 years old.

Between the ages of 46 (high school graduation) and 51 (peak college tuition), our kids are leaving the nest. After that, we either keep our home forever, or we downsize into a smaller home… which we then keep forever… 

And here’s the thing…

This trend of Boomers staying in their homes is NOT going to slow down, except for some forced selling due to defaults in the next downturn ahead. 

On the other hand, the last Boomer trend, of dying and becoming sellers, is just starting to accelerate. That changes everything. 

My point is this: While this latest real estate bubble formed for different reasons than the last one, it’ll have the same outcome. The Baby Boomers will make sure of that.

This present bubble is peaking because of limited supply in a still-overstimulated economy.

Once that ends, by early 2020 at the latest, supply will explode… and prices will get buried along with later stage aging Baby Boomers who sell because they die!

In other words, this under-supply is going to rather quickly switch to oversupply. How many people are going to see that coming?

If you know of any young families who want to own a home, offer them this suggestion: wait to buy one much cheaper about three to five years from now.

And for us older folds, seriously consider selling and downsizing NOW while the sun is still shining on prices!

Do yourself a favor: Do the opposite of what everyone is doing at your age. Don’t listen to your neighbors at cocktail parties.

Harry

http://economyandmarkets.com

Follow me on Twitter @HarryDentjr

P.S. Another way to stay ahead is by reading the 27 simple stock secrets that our Seven-Figure Trader says are worth $588,221. You’ll find the details here.

Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.

Copyright © 2018 Harry Dent- All Rights Reserved 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 losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Harry Dent Archive

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


Post Comment

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