This was an analysis taken from Wealth Daily. This is followed by my analysis.
1.The National Association of Realtors' chief economist, Lawrence Yun, just forecast 716,000 housing starts this year on sustainable job growth, the increasing population, and continued low interest rates driving construction.
1.The National Association of Realtors' chief economist, Lawrence Yun, just forecast 716,000 housing starts this year on sustainable job growth, the increasing population, and continued low interest rates driving construction.
That's great news if the existing supply burned down. Bulldoze the supply, rebuild the homes, and those numbers look great.
2.Fannie Mae believes "home prices probably will start to gain in 2011’s third quarter and rise 0.6 percent for the year, the first annual advance since 2006.”
They also expect housing starts to increase 17.3% this year, hitting 710,000.
I'll be sure to heed the well-researched "guess" of Fannie Mae, that respected bastion of real estate know-how.
3.These predictions are the stuff of delirious daydreams. Truth is, with a glut of properties still on the market and more Americans heading to the poor house on imbecilic inflationary actions of the Fed, adding more glut to the market and/or assuming that housing prices will appreciate is delusional, plain and simple.
4.the large backlog of foreclosures along with the backlog of non-distressed properties — held back for an improving market — will only glut the market much longer than any one realizes. Sure, you could argue that lower prices and low mortgage rates could spur home buyers. But that's not likely with much higher credit standards and much larger down payment requisites.
5.And David Rosenberg told the Financial Times: “If home prices don’t decline at least another 10 per cent, then the laws of supply and demand will end up being repealed as far as it pertains to residential real estate.” Housing will not recover until 2012 — at the earliest.
6.Do not buy into housing bullishness... not yet. The bulls are getting way ahead of themselves.
My Analysis: There is no such thing as perfect timing in any market. There are only buy and sell areas accompanied by risk. If there was a way of calculating timing by looking at the numbers, it would be the best kept secret on the planet. The buy opportunities to look for are usually "When blood is running in the streets" (Hypothetically, for all the politically correct). based on this, US real estate is in the "buy area zone".
One might ask oneself, where is the money going to come from? The Dow has rallied from 6500 to 12100 since the crash of 2008. The US dollar has been strongly devalued over the period sending up the price of commodities including food. At the same time world population continues to grow, exacerbating inflation. Central banks are in the printing mode. The rising markets are telling me that they sense inflation is on the way, so cash is now looking for ways to protect itself. Gold was the forerunner, followed by other commodities and then the equity markets. Whats left? With all these rising prices, and a rush to real assets (Art, diamonds etc.) Its just a matter of time until the markets discover US real estate. So at the risk of getting ahead of myself, my suggestion is to carefully diversify one's portfolio to include US real estate.
And the risk? There is always risk. Usually it is an unforseen risk. Something like a major confrontation between nations or a sudden collapse in the US bond market. Thats why diversification is so important.
Don't believe that the world owes you a living; the world owes you nothing - it was here first - Robert Jones Burdette
H
My Analysis: There is no such thing as perfect timing in any market. There are only buy and sell areas accompanied by risk. If there was a way of calculating timing by looking at the numbers, it would be the best kept secret on the planet. The buy opportunities to look for are usually "When blood is running in the streets" (Hypothetically, for all the politically correct). based on this, US real estate is in the "buy area zone".
One might ask oneself, where is the money going to come from? The Dow has rallied from 6500 to 12100 since the crash of 2008. The US dollar has been strongly devalued over the period sending up the price of commodities including food. At the same time world population continues to grow, exacerbating inflation. Central banks are in the printing mode. The rising markets are telling me that they sense inflation is on the way, so cash is now looking for ways to protect itself. Gold was the forerunner, followed by other commodities and then the equity markets. Whats left? With all these rising prices, and a rush to real assets (Art, diamonds etc.) Its just a matter of time until the markets discover US real estate. So at the risk of getting ahead of myself, my suggestion is to carefully diversify one's portfolio to include US real estate.
And the risk? There is always risk. Usually it is an unforseen risk. Something like a major confrontation between nations or a sudden collapse in the US bond market. Thats why diversification is so important.
Don't believe that the world owes you a living; the world owes you nothing - it was here first - Robert Jones Burdette
H
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