Real Estate in Secular Uptrend

It’s interesting that headlines now focus on the positive of price increases. They used to focus on the doom of lower transaction volume. No clue how so many people missed that high rates would crush inventory levels, so RE wouldn’t collapse.

Better hope mortgage rate don’t decline too fast. Too fast declining mortgage rate would unleash excessive demand that would drive price acceleration which eventually lead to high inflation again. The preferred scenario is for mortgage rate to decline slowly so as not to unleash too high demand and give time for builders to increase new construction.

The housing portion of the inflation index has a TON of lag. The fed will completely miss it again. It’s why inflation isn’t closer to 2%. Truflation has it at 2.56%, and the biggest delta is they use market rent vs. average of rents being paid.

Ultra Luxury market (2 x median) is still in doldrums.
Move up market (0.75-1.25 median) is getting warm. Could explode if mortgage rate drops below 6%.
Entry market (below 0.75 median) remains hot.

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For me, RE investment is a diversification from stocks. Still buying on average, one SFH per year.
Rents have softened, renewals at no change in rent.

My target allocation to RE is 20% but because stocks always appreciate faster, so yet to achieve the target.

Price of my SFH in CU is near ATH. Should make a new ATH this year.

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Housing Price Forecasts for 2024: Illinois and Chicago MSA

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Nothing much to say. Seasonal price appreciation during Spring season. Based on charts, the bull trend in CU has started since Jan 2023. Prices in Austin is sideways from Jan 2023… went up then decline and now up again… net hardly change.

Prices in CU are making new ATHs.
Prices in Austin inch up. About 25% below ATH established in mid 2022.

Real estate is in secular uptrend. Covid brought about sharp climb and then plunge but didn’t dent the uptrend. In the long run, you should make money. Ofc, if your timing is so shit that you bought during first half of 2022, blame your bad luck. This is especially true if your RE purchases are in Austin. Anyhoo, your sincerely didn’t buy any houses in Austin in 2022, the trend is obvious :roll_eyes: In fact, those who have bought Austin houses in 2022 are Johnny Come Lately.