Robert Prechter, the "Elliot Wave" theorist, employs two of my clients as writers.
Robert's outlook is not rosy.
Prechter is a high level macro thinker, but most of us live in the local, right?
Greenville is a good example a a metropolitan city that has decent employment, and that is what will determine the over vs. not over, in every part and parcel of the USA.
Another writer, John Mauldin, who just published "The End Game" has called this the "muddle through" economy for about 3 years.
So, in the simplest terms, I foresee a steady rate of foreclosure and short sale inventory for the next two decades across the country and I want to become a HUD local listing broker within 3-5 years.
Regardless, housing in my submarkets is a terrific value and across price ranges, demand exceeds supply. But...
62% of all Georgia mortgages originated in 2011 were FHA loans.
The USA's contraduopolistic politics, diminished currency value and poor leadership for generations, will challenge every local economy for decades to come, and if other countries are facing austerity measures, just wait til some of the communities in our couch potato Facebook nation get squeezed.
As for me in Intown Atlanta and Decatur, GA I know that it's not over and I will not ever call it over because about 20-30% of the metro ATL market is going to be distressed for years to come. However, when I study diverse submarkets like Virginia Highland, downtown Decatur or Brookwood Hills, I see 95% market health, anchored by solid community institutions like good schools and by great neighbors who love walkable streets and who support the restaurants and businesses that make our world go 'round....
Best hyperlocal example from my city, which is not in crisis - the last restaurant that went out of business in Decatur was Ruby Tuesdays in June.
Robert Prechter encourages investors to stay out of debt instrument investments, and his call for serious hedges against long term T bills is a harbinger for a credit crisis that can flatten any housing boom. That's the stuff that makes anyone a fool for calling a recent bottom across metro Atlanta.
I'll leave you with this upbeat note and a web reference that links you to this late June article called "Sell Paper, Buy Bricks."
Regular readers of The Daily Reckoning may recall that their writer, "Chris Mayer, editor of Capital and Crisis, has also become a big fan of US housing-based investments." He wrote:
â€œBeing bullish on housing is a contrarian view,â€ says Chris. â€œIn a recent national survey, 37% of homeowners say they think buying a house is a â€˜risky investment.â€™ And 86% think prices will either stay flat or fall.
But Chris believes the housing doom-and-gloomers have got it wrong. He thinks the housing market is on the verge of a rebound. â€œReal estate is intensely local, of course,â€ says Chris. â€œIt is hard to generalize. But clearly, there is value out there.
â€œOne individual I know runs a partnership that has purchased 87 homes in Georgia and North Carolina during the last year. When he leases out these homes, his firm averages a 16.5% gross yield. Thatâ€™s annual rent divided by purchase price, plus closing costs and estimated repair costs. And that is without leverage, net of all expenses, and includes estimates for vacancy and maintenance.
â€œThis is what the big-picture guys miss,â€ Chris continues. â€œEconomists can talk all they want about how a housing recovery is years away. Maybe so, but the opportunity to invest and make good money is now. In a world of sub-2% Treasury rates, 16.5% gross ainâ€™t bad.
â€œNow, I am not saying a housing boom is about to happen,â€ Chris concludes. â€œThere is more wood to chop before we get there. But I am saying that American housing, as an investment asset, looks cheap.â€
â€œBye-bye, then, to the McMansion phase of the American home investment cycle,â€ ... â€œHello to the era of McBargain."