This guy says a housing bubble is brewing because: A) incomes aren’t going up as fast as homes prices, B) the cost of building materials has risen, and C) oil production should collapse. But if gas prices go up higher, aren’t electric or hybrid cars the answer? For home prices to fall, we would need desperate sellers who need the money so bad they will sell at any price, which sounds more like a boomer liquidation sale – which has been elusive so far, and mitigated by reverse mortgages.
Hat tip to Richard for submitting – here’s the summary:
For these reasons, I see a 3 Stage Collapse of the U.S. Housing Market. The 1st stage of the housing collapse will occur when the broader markets experience a 25-50% sell-off. At this point, the U.S. median home price will fall 40% to $200,000. As U.S. oil production continues to decline, we will enter the second stage as the U.S. median home price drops 60% to $120,000.
The 3rd stage of the U.S. Housing Collapse will occur likely by 2030 (or possibly sooner) as domestic oil production falls 50-75%. As Americans and citizens of the world understand that oil production will continue to decline, the value of stocks, bonds, and real estate will also continue to fall. Which is why I see the U.S. median home price to $40,000 in the 3rd stage of the collapse.
Of course, my timing could be off by a few years, but not decades. Either way, the notion that real estate values will always rise in the future will be DEAD for GOOD as the market is impacted negatively due to falling oil production.Link to Full Article