muses of the moment

November 19, 2009

Martin Armstrong’s latest letter:A Forecast for Real Estate

Click here for Martin Armstrong’s latest letter dated November 15, 2009 entitled A Forecast for Real Estate. (12 pages) Same letter but different link here.

Excellent read. If you are a home owner or plan to be one, read this real estate prediction of Martin Armstrong and his cycle theory. Homes as investments need to be view differently in the next 20 years than they did in the last 20 years.

We are in a 26 year decline in real estate as an investment class.
Therefore, houses should no longer be looked at as a place to store one’s wealth for the next 26 years. Prices (in inflation-adjusted terms) will be declining during this period and will not “keep up” with inflation as well as gold or possibly stocks.
Therefore, if you want to purchase a house, look at it as a sustainable place to live for the next 20 years and only from that perspective. This has definite value for survival and living, but not an investment. Energy/water prices will go up, so having the ability to modify your own house has value, but don’t expect to get money out of your house to make those additions. The value will not rise as it did between 2000-2007.
It looks like the real estate market will turn upward in 2012, but will peak and take a hard slow decline in 2015 until 2023.
Just things to think about for the timing of purchasing or selling.
If you have most of your “retirement savings” in your home, do not rely on that as your only retirement funding. Start saving now in other investments.
Some real estate categories that may fair better…commercial real estate bought cheap and with a small or no mortgage where rents will keep up with inflation. And land/farms, bought cheap with little mortgage where commodities can be produced that will keep up with inflation.
At the end of this cycle (2030), it will be time to look at real estate as a possible investment again. This will be the beginning of the “spring” cycle of the K-wave.
Update: additional post about Martin’s Real Estate Cycle.
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2 Comments »

  1. […] of mortgage-backed securities could cause that slight turning point that Martin called in his real estate chart from 2012-2015 before the fall into a 2032 low. Like this:LikeBe the first to like this. Leave a […]

    Pingback by Latest blog post from Martin Armstrong dated September 13, 2012 « muses of the moment — September 14, 2012 @ 2:40 pm

  2. […] This Chart of the Day is right in line with Martin Armstrong’s Real Estate Cycle. […]

    Pingback by US Housing Market | muses of the moment — September 13, 2013 @ 1:36 am


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