I've been a real-estate investor for the last 10 years and I've made many right and wrong decisions regarding my investments over that period. I was hit hard in 2008 because I was more using my internal (uneducated) gut feeling towards my investment decisions, rather than taking a more educated, market-research driven and numbers approach. I lost a lot on that market crash but hey, learning is not free. Those mistakes gave me a wake up call and altered my investment approach, not only in real estate, but in all my other investments too.
By studying the price movements of real-estate both locally and internationally, and by understanding the real estate economic cycles within the broader business cycles, together with looking at the urbanization rates in different countries and the demographic trends and geopolitical cycles, I expect certain future movements in real estate prices. those movement expectations are not blind guesses looking into some fancy crystal balls. They are statistical expectations based on numbers, calculations and the previously mentioned trends and indicators.
During the previous economic crisis in 2008, the residential real-estate prices internationally went down an average of 34% while the commercial real-estate prices went down an average of 43%.
It's expected by the mid of 2018 (or according to some real-estate price analysts as early as the second quarter of 2018, and throughout the coming five years, that the real-estate prices internationally (both residential and commercial) to fall an average of 56% to 67% from the 2007 peak prices.
The real-estate market is on an falling trend opposite of that of the cryptocurrency market. And this real-estate fall in prices actually makes sense to me because of the following reason: More investors (individuals and institutional) are taking their money off the real estate and precious metal markets and putting that money in the cryptocurrency market, which explains the increasing market cap of cryptocurrencies (currently estimated at 600 Billion US dollars).
So, I recommend that you don't buy any real estate now and wait for this expected fall in prices where it's likely to be a buyer bear market with abundant buying opportunities with minimum market prices. Actually, the real-estate market has been bearish for the last two years with the curve getting steeper towards down over the last six months.
Remember, savvy investors buy low and hold (or sell high for capital gains, but they turn those capital gains immediately to new buying investments).
Picture 1 Source: https://www.marketmechina.com/what-are-chinese-real-estate-buyers-investing-in-abroad/
Picture 2 Source: https://www.cbsnews.com/news/top-5-states-for-depreciating-home-values/
Picture 3 Source: https://polarbearscience.com/tag/crystal-ball/
Picture 4 Source: https://marijankoturic.com/mississauga-peel-region-real-estate-market-analysis-charts/
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Housing market is still over priced and is slowly correcting itself I expect this current cycle to last 3 more years should be a lot longer as it's only 0% interest that has kept the prices so high
Good economic article, real state seems that will continue falling in 2018 because of instability in most of the fields
Yes, i agree... there's a global economic shrinking in most of the financial sectors. It's a natural economic state leading up to the coming financial crash.
I am hoping for this. Will wait to buy home.
Good subject there. I'm starting to get interested in real estate investment. Could you make a series about the basic rules and concepts of real estate? You would have my vote and all of my atention!
Keep those good posts coming! :)
Yes, I'm setting up to start making videos on DTube. I'll put such videos there talking about real estate investment as well as stock market investments and business valuation.
very nice
Thank you
my home value has be shooting up the past few years. so this scares me :-) followed.
If you are not planning to sell your house, then there's no reason to be scared. You can keep using it regardless of its market value. And in case you look into investing in real estate, the prices will be much more affordable when the market goes down. It's a buy / hold / rent investment strategy.
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if they add bitcoin as a payment then think about the uptrend anyways thanks for posting this :)
Yes, I can see a continous uptrend in the bitcoin and the other cryptocurrencies, but for the real estate I don't see that happening over this year because of the migration of capital from there to the cryptoworld, in addition to the increasing supply of real estate against the demand. Also, considering the real-estate related financial derivatives increasing again from most of the banks in the USA, it doesn't seem the trend is going up again soon before it hits bottom.
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Thank you very much.
Sellers in Scottsdale, AZ are right back to 2006 thinking they can charge ridiculous amounts.
If they don't manage to sell now, they are in for a big surprise (unfortunately a sad one) over the next few months.
@nuridin upvoted & great read. Even in Vancouver Canada, real estate has reached its peak. I doubled my money when i sold last year. The market is stagnant now. Prices are way too high now and I prefer renting for next few years.
Yes, renting is the way to go from now on. That market stagnation is cyclically natural before the downturn.
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Nice artical. Even here in California , you can see small drops in prices. Not much but the trend is going down not up. I have also seen reports of drops in Washington state.
Very true. I expect that you'll be seeing more of those drops over the next few weeks and months.
I always dream of becoming an real estate investor. Someday, I wish I can be just like you.
Excellent direction. I wish you the best of luck down that path. If you need anything in this area let me know.
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Interesting... I hope this anticipated financial crash doesn't cause too much harm. I wonder how it will impact cryptocurrency?
It will help in boosting the cryptocurrency marketcap and hence the prices of cryptocurrencies. It will have negative impact on Fiat money holders and will cause a crash in price in the stock market and the real estate market, which is still a good opportunity for investors in those markets.
Okay got it, thanks for the reply!
Fake news. If there is any meaningful correlation between the housing market and cryptocurrencies. Cryptocurrency market cap should be much larger. Since crypto currencies is still such a small % of the global investments.
I'm not sure which news you describe as fake? And if you do you research about the housing market and the current cryptocurrency market, you'll know the size of each. The facts are out there, they don't need personal opinions.
I guess its not fake news. Just have a hard time seeing the facts where cryptocurrencies have a role in the decline in housing market.