Home | About Us | Resources | Archive | Free Reports | Market Window |
How to Make Hundreds-of-Percent Profits in HousingBy
Monday, June 24, 2013
The numbers just came out... and they're excellent...
The median existing home price is up 15.4% year over year... to $208,000. But even at these higher prices, homes are going fast...
The latest numbers show that houses are only on the market for 41 days before they sell, versus 72 days a year ago. (These numbers are nationwide medians.)
The demand for homes is back, but we don't have enough supply yet. This means higher prices are ahead.
So even though house prices are up, I don't think you've missed it yet... The opportunity is still great... Hundreds-of-percent profits are possible, as I'll show you.
I don't think I'll ever see an opportunity this good in U.S. housing again... Not in my lifetime. We're coming off record-low mortgage rates and the largest fall in home prices in my lifetime.
I don't think we will see these two things happen at the same time and to the same degree ever again.
It's simple...
We've only seen an opportunity this good once in history... the 1970s. Back then, buying a home with a mortgage would have resulted in a 680% gain on your initial investment.
From 1970 to 1980, house prices went up from $22,000 to $56,500.
If you bought a house in 1970 with a 20% down payment ($4,400), a decade later you'd be sitting on a 684% return on your initial investment. (This return doesn't include property taxes or interest or anything. It's just comparing the initial equity in 1970 – the down payment – to the rise in value by 1980.) The table below shows the math:
Here's the thing: Housing was affordable in the early 1970s. And house prices soared. Today – after the great bust, and with our ultra-low mortgage rates – housing is affordable again. Triple-digit gains – even with a big down payment like in the example above – are certainly possible. I expect we'll see them.
Your upside potential is incredible, by the way... even if interest rates are going up... Interest rates in the 1970s shot up – from 7.5% to near 15%. House prices went straight up, too.
I've been urging you to buy real estate in recent years. I hope you've followed my advice... You should be up at this point already. The good news is, it ain't over yet.
If you haven't followed my advice, you still can. Don't miss out. Take advantage of it!
Good investing,
Steve
Further Reading:
Find more recent essays on the big opportunity in housing here...
A "Once in TWO Generations" Real Estate Opportunity
"This opportunity has the potential to protect you against the inflation that central banks are creating, and it could provide your cash-flow safety net in retirement.'" EXACTLY How High Home Prices Should Go
How high can home prices go? "Here's one simple measure we use to find out..." Massive Changes in the Housing Market... What to Do
"Many people are giving up... They think the deals are gone... They think, 'Why should we pay market price, or God forbid, above market price, for a house now?'" Market NotesNEW HIGHS OF NOTE LAST WEEK
V.F. Corporation (VFC)... North Face, Wrangler
Cigna (CI)... insurance Boeing (BA)... airplanes Burger King Worldwide (BKW)... fast food People's United Financial (PBCT)... bank Domino's Pizza (DPZ)... fast food Northrop Grumman (NOC)... "offense" contractor NEW LOWS OF NOTE LAST WEEK
Natural resources wipeout...
Goldcorp (GG)... gold stock
Gold Fields (GFI)... gold stock Yamana Gold (AUY)... gold stock Barrick Gold (ABX)... gold stock Royal Gold (RGLD)... gold stock Agnico-Eagle (AEM)... gold stock Eldorado Gold (EGO)... gold stock Harmony Gold (HMY)... gold stock Franco Nevada (FNV)... gold stock Novagold Resources (NG)... gold stock Allied Nevada Gold (ANV)... gold stock Posco (PKX)... Korean steelmaker Rio Tinto (RIO)... diversified mining Teck Resources (TCK)... diversified mining BHP Billiton (BHP)... diversified mining Peabody Energy (BTU)... coal stock Arch Coal (ACI)... coal stock Petrobras (PBR)... state-owned oil company Pan American Silver (PAAS)... silver stock Silver Wheaton (SLW)... silver stock Hecla Mining (HL)... silver stock Southern Peru Copper (SCCO)... copper stock Vale (VALE)... iron-ore stock |
In The Daily Crux
Recent Articles
|