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The landscape:
Imminent US real estate market crash
- Lumber is near term low, which usually tracks with homebuilders. Very simple to understand, lumber is still primary material to build houses. Housing recovery built on faith
- Institutional players entered market such as BlackRock and JPMorgan (and many others) now exiting. Smart money getting out of stocks and real estate These new investor buyers have been artificially inflating the market in many areas.
- Fed policy – Fed will stop buying mortgage securities This will drive the cost of financing through the roof.
- Demographic shift, baby boomers retiring and new generation not buying more houses.
- Lack of foreign support – Due to a global tax witch hunt, and a European banking crisis, foreigners who previously supported US market will support to lesser extent
- Job crisis – while unemployment figures officially claim we have a job recovery, companies are laying off workers in record amounts. Unemployed people don’t buy houses. Workers who are laid off may have to sell their house.
- Bond market collapse – For those retirees who keep their money in bonds, with the pending bond market crash they will have less money to pay for their houses.
