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Real Estate CYCLES - The Current Cycle we are in...
Note: Been pounding the table to BUY SMART any real estate since 2010. Keep buying SMART.
There are literally TRILLIONS of cash dollars laying around in the BIG BANKS, businesses, etc.
The inevitable WALL STREET GREED will be back and “in general” the Real Estate “market” will move much, much, higher.
Classic supply and demand. TOO much cash, chasing too few goods (yield).
Once Wall Street finds a way to massively “package” Investor loans, landlord loans, single family owner occupied loans, etc. ONCE AGAIN "real estate" will keep going up.
The Real Estate “Market” will rise till 2022-2024 or so, THEN SELL ALL…
Please let me know where I can find your crystal ball!
True, the banks DO have trillions of dollars lying around but they aren't lending it because they can make risk free money by buying treasuries from the Fed at lower interest rates. Why would they lend it to people who may or may not pay their mortgage.
And if you claim the real estate "market" is going to rise then you have a lot to learn as there is no "market". There are lots of "markets".
But good luck with your strategy. Check back in 2022-2024 to let us know how that worked out for you.
3 years up 30-40%. Good luck waiting all your life.
Your reply shows your level of experience. You're assuming that since you've seen a 30-40% return that you're going to see those returns for another 7-9 years? Clearly you've studied real estate cycles thoroughly.
And who said I am waiting? I guess that came from the same crystal ball.
Best of luck.
It's all about "WALL STREET TYPE" GREED. The banks and gov't and businesses will eventually lend and create the next bubble. It's always fear and its now GREED.
Im always surprised at the negative comments when someone talks about the real estate cycle, especially when history tells us it is somewhat predictable.
Can someone predict the exact inflection point? Of course not, but it is useful to be aware of what part of the cycle we are in and what the next phase of the cycle is.
Everyone will be shocked at the much higher prices by 2022-2024. Gains will be higher in the better areas. What can actually drag the "gains" are the stagnant areas that will never go up. Don't invest there. The Biggest points for MUCH higher prices (since 2012) are
1. Too much demand chasing too little "retail" ready supply (Hello Economics 101). 2. Interest rates around 4%. Are you kidding me - Have you looked at the last 50-60 years-that is way too low and makes it much more affordable. 3. GREED - This will push Better Real Estate much higher - IT NEVER FAILS. There is way way way too much CASH on the sidelines - THEY ALWAYS chase higher yields.
I don't know what #3 above will exactly look like. It could be Crazy Investor Loans - giving loans on investment Real Estate packaged by Wall Street (think about the Stupid Loans they gave to Home Owners - So why not Stupid Loans to Investors eventually - just a thought.
Watch how the FED always mentions Housing Prices, etc. The Gov't will probably want to find a way to get banks, etc. to make loans. The Government actually LOVES INFLATION. Don't be fooled. They (gov't) can then pay off their debt with cheaper money.
This video is from 2011. It explains the different economic and real estate cycles
I do not worry about the next downturn. I learned in the last one about how to NOT invest. Now we know better. We buy the cheap houses in our area for cash at around 50k or so. When the market goes down, we buy even more of these houses. Our long term strategy is buy and hold owner finance.
I always think 3-5 % is the annual appreciation to go when I analyze deals. This is from investment perspective. Anything higher than that has some speculation element in it. Real Estate market is similar to other market, which is unpredictable, nobody can predict the future clearly, And it is tied to other market to, positively or negatively.
So the overall market may go up 20% next year, but here is where you need to distinguish be smart and being lucky. The point is if you do real estate all the time, you live through high and low market and your average return should be all right. And without the ability to predict future, a better mindset is "I don't know, and I don't care", cuz you know overall it is going up.
But I do think local market is a little easier to predict if you have knowledge and experience, but don't count on too much to appreciation is the key I think.
The video above is a great start. Allan Kendall (see all his videos) to get the gist. His scenario is very likely, although I think Allan's magnitude sounds a little too high.
I have to reboot this thread. Its pretty spot on, only time will tell when the correction / bust starts. Possibly 11/2020?
Also I have been trying to find new videos by Alan Kendall, he has disappeared as well as his website.
2024 is here. Real Estate will peak/plato around 2026. Once RE start going down Sharemarkets will follow, foreclosures, blood on Wall Street, more war and military activity, study history, study Phil J Anderson, Fred Harrison, Akhil Patel.
Very difficult times are coming, but not until 2026. Then it will start all over again. Another 20 year cycle.
