Be confident, be bold, but stop doing it after 2022.
“None of the financial regulations and diversification mandates will stop the real estate boom of 2012-2022. The 18-year cycle is still on track, which will most probably plunge the economy into its next depression in 2026, 18 years after the Depression of 2008.”
Fred Foldvary is the best economist on real estate cycle.
“Foldvary is notably known for going on record in the American Journal of Economics and Sociology in 1997 to predict the exact timing of the 2008 economic depression—eleven years before the event occurred. He was able to do so due to his extensive knowledge of the real-estate cycle.”
He received his B.A. in economics from the University of California at Berkeley, and his M.A. and Ph.D. in economics from George Mason University. He has taught economics at Virginia Tech, John F. Kennedy University, Santa Clara University, and currently teaches at San Jose State University.
Real estate investors are the smart people.
“Why does the cycle keep repeating? Because policy makers, journalists, financial analysts, and even economists see only the appearances—the financial roles of banks, insurance firms, brokerage services, and government regulations. They don’t look literally beneath the financial surface down to the land. It is land value that rises and falls; the financial superstructure and markets are just reacting to and exploiting the fundamental dynamics of land values.”
Think of a possible recession starting this year. Real estate like to go down further.
Entire financial sector is down. See all banks BAC, FITB, RF, SIVB, DFS, USB,JPM, MS, GS and WFC are down and down
Dow was down heavily - 496 Friday and Futures are also down -596 (it may change by Sunday night)
I really do not see boom until 2022, but right time to enter when we are in deep recession soon.
It could be a slowdown, or a short recession caused by international factors.
I’m not very concerned by housing market. I think an international recession might not cause much damage to domestic housing market.
It will cause more pain to Wall Street. Main Street should be fine. Housing market may experience something like 2001 after the terror attack.
When S&P 500 hit 20% from peak, they call it recession, then 2 or 3 subsequent qtrs down, deep recession. Any recession here is an issue with Real estate.
Until 2022, I do not see boom, but good opportunity to buy real estate at low price.
This sounds reasonable. We are taking a mild dip, which actually is a good thing.
I can see a couple of things that might turn a mild dip a-la-2001 into a more serious downturn, but I don’t see any of it yet:
Liquidity events stop happening in the bay area. But, with uber and lyft just having filed for IPOs, and companies like Tencent Media Enterprises just going public, I think there is more coming in the midterm future.
The bay area stops becoming an attractive place for foreign nationals to come buy and settle. I do not see this happening either. This really boils down to one question - are rich Chinese more afraid of their own government (and want to hedge their bets) or are they more afraid of rising xenophobic sentiment in the USA? Rising xenophobia makes the the heartland in the USA a bigger question mark, but it only serves to make the coasts MORE attractive. Rich people will always seek to hedge their bets.
Sudden massive drop in the number of Gen Y people in the bay area. The bay area might become less attractive/fashionable to Millenials over time … might … but stuff like this takes long time to manifest, and by then Gen X and Baby Boomers would have passed away … if this ever even happens.
Natual Disaster - ok this might happen.
I do not know whether UBER, LYFT & AirBNB goes IPO, but will face disaster for Under Writers (Banks).
You will see the issue with TME and SHOP.
Unless there is a real value (Company value/Growth) is involved, price hiking (by vested people) will not stay long. We have seen this in year 2000 and year 2008 which started coming back in by these IPOs.
When Stock dips, BARE also dips and we do not have “Housing boom until 2022”. That is my point.
I am not disagreeing with you, and I am also choosing to look beyond the sensationlist headline of the opinion piece.
The crux I think is - where on this graph do you think the Bay Area is currently at?
This is my pure guess work, no data point attached.
Regarding real estate, market hyped are bottomed. i.e, set any high price expect 5%-10% over the list price is gone.
I see lot of inactivity on crazy short term calls as they lost lot of money in stocks. Now, the current holders are long term steady investors keeping the appreciated stocks.
No one will want to sell their stocks, AMZN, GOOGL, AAPL,…any tech stocks in bay area to buy real estate. If they are holding RSU or options which was give 3 or more years before, they may sell to buy real estate.
Now, prices are being set at a little bit higher range, and sellers ready to accept at list price range (not expecting premium). DOM is extended and I am seeing 60 days, 90 days or more on market, esp high end above 1.25M range.
The current environment is lacking only the last part - Reduction is company sales/profits and subsequent MASS LAY OFF. If that happens in 2019 (which FED wanted from 3.7% to 4.5%), we are sure of 2019-2020 bottom. It depends on how much the stock crash further.
IMO, we are in recessionary phase now on real estate, may be by end of 2019 to 2020 is right time to get lowest.
