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The Easiest Way to Profit in the Real Estate Boom

By Dr. Steve Sjuggerud
Monday, July 24, 2017

The real estate boom is nowhere near done yet...
I know what you're thinking... "The housing market has already been booming for a while now. How much longer can it go on?"
A lot longer.
The reason is simple: There's no supply of houses. (It's hard to believe... but it's true.)
With no supply, and a ton of demand, home prices can only go one way – up.
Let me show you how much supply is lagging even after a few years of this boom... And then I'll share the easiest way to make money from this...
Total housing inventory has fallen year-over-year for 24 straight months, according to the National Association of Realtors.
Let's take a closer look at this idea and what it means for us today...
Here's a chart of the housing inventory – existing homes that are currently available for sale in the U.S.
As you can see, inventory hit a record low recently. Take a look...

I want you to notice something else on this chart... Inventory hit a record high in 2007 – at the peak in house prices.
The last time housing inventory was at a level similar to today's was in 2001. Back then, you wanted to be a BUYER of real estate, not a seller.
In short, you want to bet on house prices going higher when there's no inventory... And you want to bet on house prices going lower when inventory is at record highs.
Now let's quickly look at another number: new homes being built...
You'd think homebuilders would be taking advantage of the lack of inventory. You'd think they'd be building a ton of homes. But that's not quite what's happening yet...
After the big housing bust, builders stopped building homes. It has been nearly a decade, and the rate of building is still "below trend." Take a look...

Housing starts have increased dramatically from the bottom... But they're still below average. Building hasn't caught up with demand yet. And that has kept supply low.
Today, we have a small number of homes being built, and a record low inventory of homes for sale.
Based on that, I believe home prices will soar.
And if that happens, the big beneficiary will be homebuilders...
Homebuilding is a simple business. Buy land, then build and sell houses. It's highly profitable when housing booms. And I expect the current boom to continue from here.
The easiest way to play this trend is to buy shares of homebuilding companies. And the best one-click way to trade homebuilders is through the iShares U.S. Home Construction Fund (ITB).
ITB holds a basket of homebuilding companies. And I expect it will soar as the current housing boom continues. I urge you to check it out.
Good investing,

Further Reading:

Florida real estate has been one of Steve's favorite "fat pitch" opportunities. But as we enter the middle innings of this housing boom, the easy money in Florida real estate is going away... Learn more here.
"We have hit a major supply-and-demand imbalance in America," Steve writes. If you think housing is near another bubble, think again. Prices can still go dramatically higher – even in cities like Los Angeles. Read more here.

Market Notes

Amazon (AMZN)... "FANG" stock
Netflix (NFLX)... "FANG" stock
Microsoft (MSFT)... Windows, Office, Xbox
Activision Blizzard (ATVI)... Call of Duty, Guitar Hero, World of Warcraft
The Priceline Group (PCLN)...,
PayPal (PYPL)... online payments
American Express (AXP)... credit cards
Mastercard (MA)... credit cards
Brink's (BCO)... money mover
Sotheby's (BID)... auctions
Coach (COH)... luxury purses
Carnival (CCL)... cruises
Live Nation Entertainment (LYV)... concerts
Madison Square Garden (MSG)... sports and entertainment
Constellation Brands (STZ)... Robert Mondavi, Corona
Boeing (BA)... airplanes
Fiat Chrysler Automobiles (FCAU)... cars and trucks
Cummins (CMI)... fuel engines and generators
Rockwell Automation (ROK)... industrial automation
Raytheon (RTN)... "offense" contractor
Lockheed Martin (LMT)... "offense" contractor
Century Aluminum (CENX)... aluminum
Waste Management (WM)... trash and recycling
NVR (NVR)... homebuilder
Aaron's (AAN)... rent-to-own furnishings
Stanley Black & Decker (SWK)... tools and storage
Becton Dickinson (BDX)... needles and syringes
Align Technology (ALGN)... Invisalign
Cigna (CI)... health insurance

Snap (SNAP)... social-media app
AT&T (T)... telecom giant
Harley-Davidson (HOG)... motorcycles
Buffalo Wild Wings (BWLD)... wings, beer, sports
Williams-Sonoma (WSM)... home goods

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