A boom so unstoppable it comes with a free pizza
The Week-end edition is taken from the daily Collection by Stansberry.
In a tight and competitive market, a little push or attention can go a long way …
Real wealth real estate Editors Steve Sjuggerud and Vic Lederman have written a lot recently about the boiling real estate market … and why they think it won’t end anytime soon …
With that in mind, we couldn’t help but laugh (and share) more evidence on the current state of the housing market.
Here’s the deal … Buy this house in Franklin Square on Long Island New York, and you’ll get free pizza. (As anyone who comes or has been to Long Island knows, pizza and bagels are probably the two most sought-after foods.)
You’ve probably heard of similar incentives like this in home buying and selling negotiations over the past year or so. This one is silly, but to me it makes an iconic – and surprisingly serious – point about the housing market today.
You might think that the real estate boom can’t continue … But I’m here to tell you that it can – and go.
And in today’s essay, I’m going to share how you can take advantage of it.
There is much of the demographic truth that is helping fuel the real estate boom today …
Millennials – those between the ages of 25 and 40 – are now the largest generation in America … and they’re just starting to buy homes. They need a place to live (besides their parents’ basements) and raise their families.
The pandemic accelerated the home buying trend that was already underway. Interest rates hit historic lows … mortgages became cheaper than millennials had ever known … the new ‘work from home’ environment meant people could leave the office and leave the office. cities … and those who could afford it therefore bought houses.
The big picture is that the demand is high. In the words of Steve and Vic, what we see in the housing industry is a classic situation in Economy 101.
Home prices are rising … And the companies doing business in this industry will experience tremendous growth.
From an investment standpoint, this can be great long-term investments in one of the largest parts of the US economy.
As I have said several times over the past year, with the printing of money at record levels and the debt scoreboard on the rise, this does not surprise us.
Anything that can be nailed to the ground (like houses) or found in the ground (like goods) should increase in relative value measured in dollars. In other words, the value of hard and wanted assets will increase in times of inflation.
Add in simple demographic trends and supply and demand, and you’ve got the kind of fundamental evidence that isn’t easy to find.
But while this boom has more room to run, this opportunity won’t last forever either …
As Steve wrote in a special report to Real wealth real estate subscribers at the beginning of the month …
Folks, the real estate market is hot right now. It’s time to act now … before the crowds realize the hike isn’t over yet.
It might start to happen (sort of). Earlier this week, on the front page of the mainstream financial news website CNBC.com, that photo and headline was …
CNBC also went on to describe our idea of how millennials are driving this trend …
The U.S. Census found that 12.3 million U.S. households formed from January 2012 to June 2021, but only 7 million new single-family homes were built during that time …
“The pandemic has certainly exacerbated the housing shortage in the United States, but data shows that household formations outpaced new construction long before COVID. Simply put, the supply of new construction has not responded to the demand. demand over the past five years, ”said Danielle Hale, chief economist for Realtor.com. . “Millennials, many of whom are now in their 30s and even 40s, have demystified the expectations of the industry’s ‘tenant generation’.”
But our main takeaway is different …
Numbers aside, the CNBC article noted that “manufacturers can’t tell the difference” because of the current supply chain issues today. Construction of single-family homes is actually at the slowest pace since 1995.
The article suggested that this was the reason why homebuilder stocks were “trading considerably lower” over the past week.
It may be true. But here’s why we like to approach investing as individuals rather than as a Wall Street company married to quarterly results …
If you can afford to look past the short-term concerns (which we can do as individual investors), and if you have the patience and the time to think long-term, it’s easy to see the investment opportunity that others miss …
People who can afford a new home today want to buy a new home today. The problem is, there aren’t enough of them.
It’s that simple.
And that’s a recipe for higher house prices and higher profits for the companies building them or for the “pick and shovel” companies that provide construction equipment and tools that help those companies build houses.
Despite what many people might think, this trend is not over … and we are far enough from its end that there is real value in putting this knowledge into practice now.
It will take years for the imbalance between supply and demand to be reduced. And other opportunities will present themselves until that happens.
If you are looking to anticipate the real estate market, be aware that house prices are likely to go up from here.
And if you want to invest some fresh money in this area today, Steve and Vic say it’s a great move.
All my wishes,
Editor’s Note: In his latest free presentation, Steve delves into the “whys” behind the current real estate boom and reveals his “Big Call # 1 of the 2020s”. He also explains why real estate investing isn’t just about buying physical properties … and why this “fad” isn’t a fad at all. You don’t want to miss what Steve sees coming for the boiling housing industry. Click here for more details.