This Economist Says NOW is the Time to Buy Real Estate!

[Brad Noe]

Like any other prudent real estate investor, I am constantly monitoring and forecasting as best I can the health of the economy. I have to admit, my heart drops a little every time I see a blog or social media post touting a doomsday scenario the impending crash. 

This past week, I attended the National Building Material Distributors Association annual conference in Colorado Springs. A couple thousand buyers, manufacturers, and distributors of building materials gathered here to network and educate themselves on various topics related to the industry. One of the speakers that addressed the crowd was an Economist named Alan Beaulieu. I found his presentation fascinating, entertaining, and jam-packed with great information and tons of statistical analysis to back his forecasts. I took a lot of notes, and thought I would share those that were most relevant to real estate investing and the housing market.

- No reason for him to believe another recession like the Great Recession from 2008-2009 will occur for at least another 10 years. A repeal of Dodd-Frank is the largest threat to this positive outlook.

- He does predict a slowdown or "bump in the road" as he called it around late 2018 or early 2019.

- We all know interest rates will have to rise at some point soon. Now is the time to invest/borrow money to buy wealth-building assets. He was VERY adamant about this. And remember, this was NOT a real estate conference he was speaking at.

- Residential loan delinquency rate is well below the 10-year average and still declining, signaling a strong and healthy housing market.

- One trend going on now and continuing in the future of housing he pointed out was demand for rentals in urban areas.

- Apartment vacancies are growing in many markets. Large multi-family is starting to look overbuilt.

- California, West Virginia, and Illinois have declining populations.

- Southeastern US, namely the coastal states, are showing strong population growth.

- Toronto, Vancouver, and Seattle are bubbles that will eventually burst and could cause temporary volatility in their respective regions.

- US housing prices projected to continue upward trend overall until 2029. (Again, a repeal of Dodd-Frank would jeopardize this trend). 

- I wish I would have written down his reasons for it, because he had plenty of slides and stats to back it up, but his boldest prediction which he was very adamant about was that the next legitimate Recession or even possibly Depression will hit sometime around the late 2020's to the early 2030's.

Cheers!