Housing Bubble Predictions For 2017
What’s your housing bubble prediction for 2017? Nashville Public Radio, “Home sales in Nashville have surged in recent years. The median price for a single family home is up by nearly half since 2012. Most realtors and analysts don’t see the market slowing down anytime soon. But we talked to one who says he can predict the exact month that will happen. ‘The Nashville market is probably one of the best housing markets in the United States,’ says Edsel Charles, the chairman of Franklin-based MarketGraphics Research Group Inc.”
“Charles projects Nashville’s home sales will stay strong until 2020. Actually, May of 2020 to be exact. That’s when the economic cycle nationwide will begin to wane, pulling Nashville down with it. Until then, he describes the next few years as going something like this. ‘So we’re going to go from today, grow, come down a little bit and then go back up,’ he says.”
The multifamily market? “This year Nashville has seen a tidal wave of apartments being built and coming up for rent. And experts say the market is starting to get water-logged. Longtime apartment developer Marty Heflin says Nashville’s hit the peak of its apartment building boom. ‘I think we’re headed to the bottom right now,’ Heflin says.”
“Recent data from Colliers International, a commercial real estate firm, show more than 10,000 apartments are slated to come online over the next year — yet another record for new supply. And Germantown is ground zero for the onslaught, with roughly 4,000 of those apartments. But research shows the rate at which they’re being rented is beginning to wane. And Heflin says developers are working hard to find tenants as fast as possible.”
“‘In some of the higher-end developments around town, you are starting to see one, two, three months free,’ Heflin says. ‘We are not quite to clowns twirling signs in the streets yet for ‘come on in a lease right away.’ But I would say it’s definitely becoming a concessionary environment right now.’”
From Pound Sterling Live. “It may be the great irony of Trump’s presidency that when a property developer came into office the first thing that happened was that the bottom fell out of the property market. Yet that appears to be exactly what may be happening if recent data and forecasts from certain analysts are anything to go by.”
“Nordea Bank analyst Aurelija Augulyte has been expecting a slump in housing, and has forecast a full-scale downturn in the sector in 2017. She notes how history shows that it only takes a 100 basis point rise, or 1.0%, in interest rates (and mortgage rates) to cause a recession. A steady decline in residential investment is another early indicator of a slowdown in the sector.”
“‘Housing market is key, residential investment is one of the best leading indicators for the US economy. The recent rise in yields will dampen the housing market activity. In fact, it doesn’t take much – just another 100bp rise in mortgage rates, and we have a US recession? Yes, I think in some form or shape, we will have a word ‘recession’ as a theme and driver during 2017,’ said Augulyte.”
From six months ago. “Predictions: Major political or economic shock hits US in August/September. Recession is belatedly found to have begun in Q2 2016. High end housing inventory continues to pile up, putting downward pressure on mid-level housing prices. Median sales prices start to drift downward as high end properties taken out of the mix. Entry-level housing remains in high demand, especially in desirable neighborhoods.”
“Presidential election is close; Hillary prevails albeit not without scandals. Brexit is shelved…”
Another said, “This is the top and there is nowhere to go from here but down, I called it in ‘07 and I’m calling it now. Inventory is loading up in the key markets: Miami, Phoenix, Atlanta, Las Vegas. SF And NY are starting to see some inventory.”
One had this, “I predict that Donald Trump will continue to be Donald Trump and his campaign will continue imploding from now through November 2016 Election Day.”
From one year ago. “How much liquidity will they drain out, that is the trillion dollar question. I still think that NIRP is coming. From some of the articles I’ve read, surveys say that people will tolerate up to negative 10% interest rates before they really get upset.”
Another said, “I was thinking of a gold price target of $1,300 for the end of 2016. $1,500 in 2017. Low in 2018 or 2019 of $890. Up from there. Not sure on oil. Probably range bound closer to $50. Stocks: Slightly new lows by March. Sluggish but up a bit by the end of the year from there. New highs by late 2017, but a Fall CRASH. BONDS: not in good shape. Getting worse. Real Estate becomes more sluggish in the vast majority of areas. The Real Estate Wealth Effect goes into reverse. TRUMP wins.”
And another, “The more likely it is that Trump wins the Republican nomination, the more likely it becomes that the Democrats will win the 2016 presidential election. I still suspect that Trump and all you Trump trolls secretly work for the Clinton campaign. I predict that Trump will continue to tap into the populist anger vibe, but the Republican base will dump him at the convention through a brokered procedure.
And finally, “At the end of The Big Short, they revealed that new irresponsible bets on housing were introduced in 2015. If that is true, the bubble in housing has not fully even reignited yet. There is no way we are anywhere near the mania I saw in 2015, so nobody here has an ounce of proof that housing is in the process of crashing. Oh yeah, Hillary will win. That’s a hard prediction.”