Hi HODLers,
I have been vocal about how much investors underestimate the impact of rising rates on the economy as a whole and especially on the housing sector which is more than 15% of GDP in developped economies.
Tuesday, October 25th
Big numbers tomorrow as we will get the full data from August, as a reminder July was the first month where prices dropped by 0.6% month on month (MoM)!
Housing Prices MoM (August)
As you can see it is the only month where it went down over the past 2 years. It has been going up every month before with quite high numbers 1%+.
As I am currently looking at prices on popular websites such as Zillow, prices are continuing to drop in October and there is no chance that they did not drop in September.
Also, when price momentum reverses it lasts a few months as you can see in the below graph:
I believe this is just beginning and as you well know, when Real Estate goes down, everything hits the fan. When you combine this with the high inflation, layoffs starting in the world (even in the Tech industry). This is quite an explosive cocktail!
I am staying in cash on the sidelines and I will be ready to hopefully buy a nice property, who knows!?
What does the Real Estate Guru @scaredycatguide think?
Stay safe out there,