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Tag Archives: Home prices

  • Blog

    Home Prices: Downhill From Here

    Why lower prices will be good for those who have prepared for them
    by Adam Taggart

    Friday, September 13, 2019, 4:31 PM

    18

    As we look into the future, we see a high risk of the world money supply increasing further. Or put in layman’s terms, your money being devalued by rampant inflation.

    But odds are high we won’t simply ride up the inflation curve in a straight line from here.

    Deflationary corrections, perhaps severe ones, will punctuate the process. And when they do, windows of very attractive investment opportunities will open.

    Take real estate; which appears to entering the start of a correction now.

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  • Blog
    adirondackalmanack.com

    A Murderous Complacency

    Dark omens are circling everywhere in today's markets
    by Adam Taggart

    Friday, February 3, 2017, 9:38 PM

    15

    Running PeakProsperity.com requires me to read and process a lot of data on a daily basis. As it's hard to digest it all in real-time, I keep a running list of charts, tables and articles that catch my attention, to return to when I have the time to give them my full attention.

    Lately, that list has been getting quite long. And it's largely full of indicators that concern me, signals that the long era of "extend and pretend" in today's markets may finally be at its terminus.

    Like crows circling overhead, everyday brings with it new worrisome statistics that portend an ill change ahead. Indeed, these signs are increasing so quickly now that it's hard not to feel like Tippi Hedren in Hitchcock's classic The Birds.

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  • Blog
    Charles Krupa

    Sorry Losers!

    How the Fed has screwed the many to benefit the few
    by Chris Martenson

    Friday, September 2, 2016, 8:48 PM

    41

    By its actions, the Federal Reserve has selected a precious few winners and many, many losers.  Sadly, you are highly likely to be one of the losers.

    Sorry!

    I'm one, too, if that helps soften the blow.

    But we have a lot of company.

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  • Blog
    Dreamstime

    The Marginal Buyer Holds The Pin That Pops Every Asset Bubble

    So it's important to watch him very closely
    by Adam Taggart

    Friday, August 19, 2016, 6:01 AM

    14

    Those of you who took an Economics class in college may remember the saying that prices are set "at the margin". That's a fancy way to say that prices are set by the person (or people) willing to pay the most.

    This person willing to pay top dollar is called the "marginal buyer". Most of us don't really think about him, but he (or she) is very, very important.

    Why? Because the marginal buyer not only determines price levels, but also their stability and degree of volatility. The behavior of the marginal buyer, as well as the degree of competition for his/her "top dog" spot, sets the prices of nearly every asset class held by today's investors.

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  • Blog

    Observations From The Heart Of Silicon Valley

    The calm before the storm?
    by Adam Taggart

    Friday, May 20, 2016, 12:11 AM

    35

    Yesterday I made the 2-hour drive back to Silicon Valley, where I lived for 15 years before moving out to the country.

    I rarely go back, as I miss very little about the hyper-elite scene there. When I do, though, I feel I have a useful 'insider-now-outsider' perspective that allows me to see things there more accurately than those who live in that fishbowl 24/7.

    What hit me most strongly upon arriving back in the Menlo Park/Palo Alto area, is how little of the craziness has changed since I left 4 years ago. I don't mean 'unchanged' though; rather that the same craziness is there, just more extreme than ever.

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  • Insider
    Greenfire/Shutterstock

    How A Major Housing Correction Can Happen Over The Next 1.5 Years

    Own a home? This is a must-read.
    by charleshughsmith

    Friday, October 9, 2015, 9:11 PM

    16

    Executive Summary

    • The Fed Won't Be Able To Soak Up Bad Mortgages Like It Once Did
    • Chinese Capital Will Dry Up After Capital Controls Are Imposed
    • The weakening petro-dollar will weaken demand for high-end housing
    • The inevitable symmetry of bubbles will force a price mean-reversion

    If you have not yet read Part 1: How Much Longer Can Our Unaffordable Housing Prices Last? available free to all readers, please click here to read it first.

    In Part 1, we looked at factors that limit further home price appreciation—mortgage rates that can’t go much lower and stagnant household incomes—and factors that could continue to push prices higher in islands of strong job growth and global demand.

    Here in Part II, we’ll look at several dynamics that could deflate the current Housing Bubble #2, even in areas currently experiencing high demand for housing such as New York City and San Francisco.

    The Fed Will Encounter Political Headwinds in Pushing Money to the Wealthy

    Setting aside cash buyers from overseas, a major factor in the inflation of Housing Bubble #2 was the Federal Reserve’s quantitative easing programs that expanded the pool of money available to the already-wealthy while prompting very little “trickling down” of this new money to the bottom 90% of households.

    The one Fed policy that aided the bottom 90% was buying $1.75 trillion of home mortgages. This unprecedented buying spree helped push mortgage rates down to equally unprecedented lows.

     

    But as this chart shows, the Fed is…

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  • Blog
    MarcelClemens/Shutterstock

    Understanding Asset Bubbles – Crash Course Chapter 17

    Why they form & how they pop
    by Adam Taggart

    Friday, October 10, 2014, 11:21 PM

    0

    Through the long sweep of history, the bursting of asset bubbles has nearly always been traumatic.  Social, political and economic upheavals have a bad habit of following asset bubbles, while wealth destruction is a guaranteed feature.

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  • Blog
    WitthayaP/Shutterstock

    The US Housing Market’s Darkening Data

    Get ready for the return of declining home prices
    by Brian Pretti

    Tuesday, June 3, 2014, 5:15 AM

    22

    The more we look at today's data, the more it looks like that we are in a new type of pricing cycle — one that homeowners and housing investors have no prior experience with.

    And the more we learn about the fundamentals underlying the current cycle, the harder it becomes to justify today's home prices on any sustained level. Meaning a downward reversion in home values is very probable in the coming years.

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  • Insider
    Tang Yan Song/Shutterstock

    Get Ready For Falling Home Prices

    Don't be as vulnerable as you were in 2008
    by Brian Pretti

    Tuesday, June 3, 2014, 5:15 AM

    3

    Executive Summary

    • The new drivers of the current housing price cycle
    • Why investment capital, not normal household formation, has become primary for pricing
    • What the implications of an investment-driven housing market are
    • Why prices will fall & what homeowners (residents & investors) can do now

    If you have not yet read The US Housing Market's Darkening Data, available free to all readers, please click here to read it first.

    The The New Drivers of The Current Housing Cycle

    1. Cash

    First, we are currently seeing something in residential real estate markets that has not occurred in our lifetimes – the magnitude of all-cash offers. 40-50% of residential real estate purchases have been for cash in recent years. This phenomenon has no precedent in recent economic history. Why is this happening?  We need to remember that a primary goal of the Federal Reserve in setting short term interest rates near 0% was to induce investors to buy “risk assets” – think real estate and common stocks.  By eliminating rate of return in safe securities such as Treasury bonds, CD’s, etc., the Fed essentially forced formerly conservative investors to purchase higher risk assets in order to get any acceptable rate of return.

    In good part, the all-cash offers are coming from investor’s intent on buying to rent. Intent on obtaining an acceptable cash on cash rate of return as yield can no longer be found in safer investments. This crosses the boundaries between investors in the asset accumulation phase of life and retirees starved for yield, draining formerly CD-centric bank accounts in order to purchase income-producing rental properties…

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  • Insider
    Gunnar3000 | Dreamstime.com

    The Time For Shorting the Market Is Approaching

    The dashboard of warning signals is getting bright
    by Chris Martenson

    Thursday, February 27, 2014, 12:55 AM

    33

    Executive Summary

    • Why stocks may average 0% return (!) for the next decade
    • The depressing data in
      • Retail sales
      • Housing
      • Manufacturing
      • Consumer confidence
    • Why the time to short the market is looking near

    If you have not yet read The Stock Market's Shaky Foundation, available free to all readers, please click here to read it first.

    To be sure, there is one piece of fundamental information that has supported equity prices; and that’s corporate earnings.

    Those have vaulted to new highs, despite the weak economic recovery, on the back of ultra-cheap borrowing (which reduces interest costs which are deducted from earnings), government deficit spending, and low household savings:

    While the parabolic rise in corporate earnings is quite impressive, they are also historically unprecedented and certainly unsustainable. 

    When we look at the same chart seen above but on a percent change yr/yr basis we see that they have been slowing down remarkably and aren't that far above the zero mark…

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