Clearly the biggest housing boom has occurred. Peaks were August 2023 and August 2006.
More new apartments and condos…peak was Nov 2022.
Construction is 1 year ahead of price….both for downturn and upturn.
Downturn was Aug 2006…price peaked 2007. Upturn was Nov 2011 and price bottom was Feb 2012 but end of 2012 was also good.
Resolutions don’t happen in this phase as bread and circus are too strong!
Clearly the decline period is managed in a relatively straight line downwards.
So expect a 36% drop in RE prices (inflation adjusted).
Current Price 325.4…about 228 in 5 years.
Approx 30% (for low inflation 1% the next 5 years…)
Some say 40% (nominal) and 7 years…7 year cycle more traditional.
Inflation adjusted rates of return (from bottom)
1999-2007 8.4%
2012-2024 6.2%
2030-2040 4%?
If you buy near a top, rate of return is just 1% not accounting for depreciation-houses get old- which would make it negative. (13% since 2007 top or 0.8% per year).
Clearly growth is slowly dying…
Finally…was expected in Jan then Mar but took longer thanks to this super-cycle 50y inflation.
WHICH IS NOW OVER.
2 year bear market 2025-2026. Unemployment to 12%….
Oil also a bear market
AIRBNB now bear also….
Quarterly unemployment is rising. Other countries more +1.4% in a year…..US +0.6%
Now waiting for a market hiccup.
You need a hiccup before Fed takes any action. Numbers alone are not enough.
up and up recession approaches…Q1 2025
Credit Flow Investor 