In 2018, my wife and I made a big change.
We hightailed out of New York City and headed to South Florida.
This is one of the best decisions we’ve ever made.
If you’ve been to New York, you know it’s utter chaos. Crossing the street, hailing a cab, catching the subway — it’s a chore when you want to go anywhere, anytime.
I did my best in such an environment. I loved eating breakfast before the sun rose before heading to the trading desk. But, as you know, our priorities change with age.
My wife and I wanted a garden for our puppies. Ultimately, we wanted more bedrooms for our family. And I won’t lie… After living in the Northeast for 40 years, I’m done wintering.
Five years ago we did it. I traded my apartment in New York for a house in the suburbs of Florida.
Since then, I have had a daughter. We are making new memories every day – and last week we toured a potential kindergarten!
And a nice bonus for all: The value of the house has almost doubled.
Of course, the past five years have been the best of times for homeowners. The pandemic, low mortgage rates, and increased remote work have forced people to buy new homes at a breakneck pace.
In fact, median home prices are higher in the last two years than they were in the last 20 years, up a whopping $133,000.
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of housing The market felt like a classic mania soon. And this bubble is about to burst.
The worst part is that America’s middle class will be hit hardest.
The reason is…
why housing set to dip
So who has a pin set to pop this housing bubble?
None other than the Federal Reserve.
If you’ve read my last article, you’ll know that I think they’re running a fraud game… trying to undo past misdeeds at the expense of everyday people.
Inflation remains unchecked despite the fastest rate hike in history.
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And there is reason to believe that more pain awaits.
Federal Reserve Governor James Bullard expects interest rates to need to rise further.it’s gonna be a death knell housing market.
The Fed’s key rate of 7% means that mortgage rates could also double, reaching 10% or even 15%.
As a result, real estate prices must fall.
As you can see, the average person can afford a $2,064 mortgage. At an interest rate of 2.5%, was Enough to buy a $525,000 home.
But if the interest rate is 10%, you can only buy a house for $240,000. The problem is that the median US home price is almost double that.
It’s home ownership slipping through the fingers of thousands of Americans. But Fed Chairman Jerome Powell doesn’t care.
He recently said: housing The prices we’re looking at should help bring them more in line with rent and other prices housing market fundamentals. And that’s good. ”
As a billionaire, Powell isn’t too worried about the home equity crash, is he?
But for people like you and me, who have equity tied up at home, it’s much more worrying.
And housing prices are already unraveling. In the last quarter alone, prices fell $27,000. This is his biggest drop since 2007 when the financial crisis began.
It’s not the only thing that goes down.
Mortgage purchase applications are down 41% year-over-year. Mortgage refinancing is down 84% from last year. Second-hand home sales also fell for the 10th straight month, the longest growth since 1999.
This means that listings have been on the market for longer and longer and prices have to come down.
what this means for you
In short, real estate could crash another 50% in the coming months. I am not alone in saying so.
new york times Stated: housing The market is worse than you think. ”
InvestorPlace reveals the “three indicators of giants”. housing “Market Crash”
When forbes asked forhousing The market crash of 2023. ”
For 1%, this housing Crashes are not game-changing issues. They will lean in and find ways to profit from the financial panic.
In the last crash, hedge fund managers like Greenlight Capital’s David Einhorn bet on the market, generating $2 billion in profits (an estimated 222,000% return).
Michael Barry of “The Big Short” made $800 million.
And John Paulson made $15 billion.
And even the 1% who aren’t wealthy wealth managers can buy real estate cash when prices crash. No need to worry about rising interest rates.
It is the middle class that is economically slaughtered as housing equity is wiped out, leaving no capital to take advantage of the low prices.
But you don’t have to be caught unprepared.
created a report. How to survive and thrive in the middle-class massacre With a full game plan ahead housing Crisis — not just inflation and what’s happening in the stock market.
Click here for details on how to obtain a copy.
nice to meet you,
Ian King Editor, strategic destiny