When Hyperinflation will occur in Home Prices

[wesleytarbuck]

I can understand your logic, but how the hell is your average person going to be able to borrow 1 million, 1.5 million to buy a home? unless they start doing 60 year mortgages. Wages have to rise SUBSTANTIALLY in that time, do you think that will happen? how can it, nobody can compete with china as it is, they certainly wont be able to with rising wages.

[MrAlanKendall]

@wesleytarbuck

When the US Government was printing 20 million dollars of cash per day throughout the 1970's, when Bank owned foreclosures were sold off in 1975 and banks started to loan agressively in 1976, homes nationwide jumped six times in price in 7 years from 1976 to 1982 even though unemployment increased when rates jumped because Airlines, Auto Manufactures and Retail were forced to layoff with higher interest payments. Govt prints 3.3 billion per day but banks not loaning yet.

[MrAlanKendall]

@wesleytarbuck

The 1970's was not the only time that unemployment increased while home prices rose. From March 2000 to March 2003 unemployment went up for 3 years during the dot com bubble but Real Estate went up each year because we were underbuilt for the population demand. This is more proof that Real Estate like any commodity follows the law of supply and demand primarily and the Economy and Interest rates secondarily. 1977-1979 had increased rates but Real Estate went up.

[wesleytarbuck]

@MrAlanKendall Thanks alan, i learn a lot from your videos :) Whats your opinion on silver and gold ?

[MrAlanKendall]

@wesleytarbuck

I believe that Silver will go to around $200/oz and Gold will go to around $10,000/oz by 2020. The Govenment cannot print 3.3. billion dollars of cash per day without massive inflation. The contraction in jobs and real estate is keeping the inflation under control for now. In the 1970's it was not until the forclosures were sold off in 1975 and the Banks started to agressively on rising real estate that money circulated in the economy an inflation set in.

[ytartapo]

demographics will disprove this

[snitchboy12]

sure lets ask the FED if they can pay for the dollar to come back. You will only see money printing from the FED

[chuckbiss]

LMAO (funny when a coin lands 3 times in a row heads, might as well bet it all ont tails...) love the dated, Fail Investment, better learn from mistakes

[FortNikitaBullion]

So is 1982 a high or low point? It's a low on the top chart and a high on the bottom chart.

[MrAlanKendall]

@FortNikitaBullion

The top and bottom pattern both feature 40 years from 1982 to 2022. The main cycle is a 40 year pattern with housing bubbles causing major recessions every 4th decade in 1890's, 1930's, 1970's and 2010's. Both the top and bottom patterns will start over in 2022. So 2022 will both be a top in Real Estate and a bottom in the next Real Estate up leg. 1982 was a top after the inflation of the 1970's and a bottom in the hiring under Reagan as the new demand for houses started

[FortNikitaBullion]

@MrAlanKendall So will precious metals also peak in 2022? I don't have the money or credit to buy real-estate, I'm only 23. I'm mainly into physical precious metals (coins) now.

[MrAlanKendall]

@FortNikitaBullion

Coins will peak with the run up in Gold and Silver this decade so some time between 2020 and 2022 I expect coins to peak. At the end of the real estate cycle, the banks sell off the last of the foreclosures for $1,000 or less. I would recommend that between Now and 2015 you buy one of these properties with little down. Fannie Mae and Freddy Mac has homes for one dollar down but they are usually in bad areas (but not always).

[FortNikitaBullion]

@MrAlanKendall I recently learned that rare coins (as opposed to bullion) did most of the booming in the late 1980s (PCGS Rare Coin Index). Any reasons why? This was during the disinflation wave.

[andrew09211]

pity humans

[pharmd718]

So every 8 years?! that's a very scientific chart ..........riiiiiiiiiiiiiiiiiii­iiiight.............

[MrAlanKendall]

@pharmd718

I expect the current depression from 2006 to last until 2016 because the last report out says that the Banks will still be selling off foreclosures until the end of 2015 and that these properties are normally sold at a discount and will depress prices until 2016.

[theweiserchoice]

Ignores demographic trends in this country also..  This is like using the rear view mirror to steer the car going forward..

[MrAlanKendall]

@theweiserchoice

Not at all, for the first time since the great depression , the US cycle is on the same beat as the California Cycle. Real Estate will remain depressed nationwide until 2015 as the foreclousres are sold off. Certainly Nevada, Arizona, California and Florida will be the last places to pick up because they have the largest number of foreclosures to sell off.

[jojomcbean]

lol are you seriously this dumb?? the market does not work like this.

[MrAlanKendall]

From 1982 to 2009 for three decades the Governent lowered rates, causing a housing bubble.  The fourth decade which we are has a housing bubble and a retracted recessing. This pattern has been going on since the mid 1800's and every fourth decade has the protracted recession with printing of money to prop up the real estate. 1890's, 1930's, 1970's and 2010's.

[fredocorleone]

You can't expect a property bubble every 16 years...the market will move to counteract economic assumptions like this.

Historical home prices should move with real inflation, if the valuation is above inflation, it's overvalued. Homes on both coasts are still overvalued IMO.

[MrAlanKendall]

@fredocorleone

In the 1970's 20 million per day of cash was being printed and we experienced homes quadrupling in 5 years when foreclosures ran out. Since now they are printing 4.1 billion per day, I expect Real Estate to at least quadruple 2015 through 2020.

[golfprobro4eagles]

what will happen when homes are priced in ameros?

[ItsaDamnPuzzle]

good theory but dont forget about the crash of the US$.. quadripple is quite modest i wld say... lets say when the foreclosers are dried out houses will rise 10 till 20 times between 2014 and 2022 if you take the devaluation of the US@ into consideration (IF the US$ will keep existing and won't be replaced by another world reserve currency)

[MrAlanKendall]

@ItsaDamnPuzzle

Yes, if you buy a $200,000 home with a fixed loan and then pay $900 in mortgage, $200 in taxes and $70 in insurance, by the end of the decade, people will be paying $5,000 in rent and you will only be paying $1,170. You will really be in good shape.

[jinha911]

Looking at those years. Basically when Democrats run the show you have the market become worse until a Republican steps in to clean after the Dems. lol just kidding

[bodybuilder77]

Good Presentation. The merging of both the inflation wave and Real Estate wave shows how much Real Estate will rise.

[rusonidehtekim]

Makes a lot of sense, inflation makes prices rise.

[3089280288]

It's the fall of the dollar that makes you spend more for the same house. The dollar is a currency, which means that its value will fluctuate. Supply and demand also contribute.