Lloy5 Aug 2018 20:28
"Massive QE and ultra-low mortgage rates created a second – now artificial bubble – that has recently eclipsed the first one. And it looks almost identical in its size and buildup time – six years from 2012 into 2018.
This bubble will burst within the next year.
Its target is the low of 2012, and likely the low of early 2000. That creates a 40% to 50% downside in the next six years, into 2024-2025 or so.
So, what has happened since the first serious real estate downturn since the one from 1925 through 1933?
According to a study by the online apartment service RENTCafé, since 2007 ownership has dropped by 3.6 million and renters have gone up by 1.9 million.
Yes, that means more Millennials living with parents, and rising homelessness.
The causes are obvious: Much tighter lending standards, remarkably low supply – especially of affordable, less profitable starter homes – along with soaring prices and valuations…
Home prices have gone up 35%, while rent is up only 20% in the last five years, making home prices 75% more expensive than rental prices. Both are way above wage gains, which have been near nil.
Overall, the bubble and crash thus far are not nearly as bad as Japan.
Our demographics aren’t as unfavorable, but still very much so given the new model of subtracting dyers from peak buyers.
In this case, peak buying in the future is at age 42 for the U.S. and age 78 for dyers, as we don’t live as long as the Japanese on average."
http://www.marketoracle.co.uk/Article62748.html