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How to Make Hundreds-of-Percent Profits in Housing

By Dr. Steve Sjuggerud
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.
 
Housing Returned 684% During the 1970s
 
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:
 
1970s Housing Gains
Starting price, January 1, 1970
$22,000
Ending price, December 31, 1979
$56,500
Down payment (starting capital)
$4,400
Capital gain
$34,500
Return on starting capital
684%

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 Notes


NEW 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

premium teaser

5.8% dividends from this little-known housing investment...
 
Investing in physical real estate isn't easy. But today there's a simple alternative...
 

In The Daily Crux



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