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Housing Market – Price Rises Explained!
Why are House Prices Exploding upwards? What’s causing this price hike?!
The good news: Booming prices will soon fall
1. My prediction of people leaving the big Cities and moving out to the suburbs has now come into effect. 13,000 empty apartments in Manhattan, NYC, LA, people leaving in droves from the BIG cities pushing prices up in those areas
2. Bidding wars! They are not everywhere all at once, it’s only in certain areas…
3. Low interest rates are what’s keeping this circus going, low interest rates won’t end anytime soon
4. Sellers are not selling right now, they are holding off on selling because they can’t find anything else to buy! Which is exacerbating the situation even further.
– The Federal Reserve is buying up mortgage backed securities at an alarming rate! Concerning! This is another reason why the market hasn’t crashed already
– We still have over 7% of mortgages in forbearance. When the forbearance ends, wow, just wait and see what happens
– The employment benefits will end soon: Furlough (UK), Stimulus & unemployment (USA), CERB (Canada) & JobSeeker (Aus) just to name a few, they will all run out soon
– Unemployment numbers are only good this week because there isn’t enough people to fire anymore!
– Over in the UK: Stamp duty – to run out soon – They’ve made the situation worse, by creating a buying frenzy right now! So the fall will be even bigger than before
– Eat out to help out – terrible scheme! Because again, it’s good right now to keep the wolf away, but once it ends, it’s proven that people don’t like to pay full price again!
– I don’t like going to the store anymore, its become too inefficient for me (mask, queuing, waiting for people to move away from the area that I want to pick up an item, etc)
– Businesses are going under. Right now they’ve been getting interest free loans, but when it comes to paying them back, they will fail
– Huge brands are declaring bankruptcy daily
– The stock market isn’t doing well! It’s only really the top companies in the stock market pulling up the others
The 7 Stages:
Stage 1: Speculation = drives prices up (prices families out) REITs gain ground
Stage 2: Low interest rates = Equity Release, housing becomes leveraged investment for further investment release
Stage 3: People live beyond means = Over optimistic GDP (Fake GDP)
Stage 4: Problem occurs (2008: ARM aka Subprime crisis / 2020 Virus) = Spending stops
Stage 5: High Unemployment = Start of Recessionary Cycle, mortgage & rent payments missed… unemployment scarring. Wage reductions.
Stage 6: Quantitative Easing…
Stage 7: Mortgage forbearance: When people can’t afford to pay their mortgages when forbearance runs out = House prices reduced to reflect supply & demand
This video is for entertainment purposes ONLY.
I am not a financial advisor or attorney. These videos shall not be construed as tax, legal or financial advice and may be outdated or inaccurate; all decisions made as a result of viewing are yours alone.