Those of you who follow this blog already know my thoughts about the coming Stock Market collapse. Will the same thing happen to the Real Estate Market?
When the stock market makes its next correction and returns to the mean, investors in search of higher gains will once again discover the real estate market. This will drive a renewed zeal for the property market.
Money moves to the site of highest returns. In 1987, when the stock market took a dive and people were looking for a place to put their money to work, real estate was almost peaking and providing a high return on investment. It happened again, in 2000 and 2001, when the stock market crashed and people started to take their money out of the stock market and invest in real estate. The next opportunity for this to occur will be the next drop in the stock market. As noted in the stock market section, this drop will probably happen by the end of 2017.
What will happen next? If the peaks of the last two real estate cycles were in 1988 and 2006, and the real estate cycle is 18 years long, then the next peak will be in the year 2024. I believe that this peak will also be driven by inflation. In addition, the next 9-year business cycle will peak about 2023, and that will affect the real estate cycle. Finally, the yin-yang effect between Real Estate and the Stock Market will boomerang back to a preference for stocks, as I believe the late 2020s and early 2030s will be a great time for the stock market (see my blog on the Dow 100,000).