• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Press Online News

Your Online U.S. News Source

PRESS ONLINE NEWS
Your Online U.S. News Source

  • Home
  • BUSINESS
  • REAL ESTATE
  • SCIENCE/TECH
  • US
  • Meet the Team
  • About/Contact

How Long Before U.S. Real Estate Suffers Deflation? :: Deflation.com

by

Can U.S. property prices really keep advancing for a few more years?

Financial and commodity market analysis is such a broad field and encompasses many different specific subjects. On the technical (or charting) side of market analysis there has always been a reverence for original works and copies of classic books are sought after. One such is “Cycles – The Mysterious Forces That Trigger Events…” by Edward R. Dewey and published in 1971. In that book, Dewey looks at cycles across a vast array, from the abundance of lynx (wild cats) in North America to stock market prices. In one chart he shows a very rhythmic cycle in U.S. Real Estate Activity lasting eighteen and one third years on average from 1795 to 1958. The “ideal cycle”, around which actual activity had tracked very closely, showed a trough around 1953.

Well, that has proven to be quite prescient for subsequent cycles. Property busts, after booms, have occurred around 1971, 1989 and 2007, all adhering to the 18-year cycle. Given this extraordinary accuracy of cycle prediction, we must have in our thoughts that the current property boom in the U.S. might last until 2025! With the current extreme level of froth and speculation in U.S. real estate, that is an utterly incredible scenario to imagine.

Remember, though, that 18-year cycle is the “ideal.” Actual activity can vary around it. It therefore makes sense to think about time windows when examining cycles. Still, it is only 13-years since the last real estate trough and so, perhaps, it is too early to think of a bust occurring just yet.

However, never in any previous cycle has the property boom been sponsored so directly by the government or central bank. In that regard, we might allow ourselves to conjecture that the intensity of the outright speculation stage in the cycle has been brought forward, and that would seem to align with what is happening with regards to “flipping” activity and prices as well as the explosion of realtors.

What is particularly interesting about this U.S. real estate mania is that it hasn’t been accompanied with an outperforming real estate sector in the stock market as was the case in the early-to-mid-noughties. Perhaps that speaks to the fact that this boom has to a large extent been artificially created and will ultimately turn out to have been a transitory illusion.

View Original Source

Filed Under: REAL ESTATE

Primary Sidebar

More to See

Republicans hammer Democrats on inflation in midterms advertising

By David Wright, CNN Republicans are leveraging voter frustration with high prices to hammer Democrats in midterms campaign ads. GOP groups and … [Read More...] about Republicans hammer Democrats on inflation in midterms advertising

Influential Women in US Politics You Should Know – SheKnows

The political landscape in the United States is always evolving as administrations change and the White House looks forward to a new crop of faces. … [Read More...] about Influential Women in US Politics You Should Know – SheKnows

Region’s home prices hit another record in February, rising to $706,000 – Orange County Register

Southern California home prices continued a 1 ½-year, double-digit climb last month, setting a record for the 11th time in just over a … [Read More...] about Region’s home prices hit another record in February, rising to $706,000 – Orange County Register

Privacy Policy | Terms and Conditions | About/ Contact
As an Amazon Associate I earn from qualifying purchases.
Copyright © 2022 · Press Online News . Log in