The Storm After The Calm

Hello! David J here again bringing you more of the steps on my journey toward financial independence.

If you currently own a home and you've been thinking about selling soon, here's some information you may want to consider...

Economists are now projecting a housing deficit in the near future. Unlike the last rise in property values which was fueled by artificial demand (improper / predatory lending, "easy money"), the next rise in property values will be fueled by REAL demand.

As of this Spring's numbers, housing starts in this country have been at or below 1960's levels since the housing bubble burst. Developers and over 2 million construction contractors have been wiped out.

During that same time period, births have been at levels not seen since the post-World-War "baby boom", and are still rising.

Even taking existing and coming foreclosures and "boomer" retirements into account, economists estimate that, given such birth rates, we currently have a housing deficit of some 5 million units, and that an additional 52 million units will be needed by 2050.

At the same time, however, housing starts have been at circa. 326 THOUSAND units annually for the past 10 calendar quarters, even longer in some areas.

This leaves a need for a consistent 1.25 million housing starts per year for the next 38 years just to meet the projected need for housing going forward. There's a significant difference between 326 thousand and 1.25 million - roughly a four-fold difference.

For this reason, some economists are predicting that housing prices will rise going forward just as rents have risen as people have lost their homes to foreclosure and/or loss of income and have become renters.

Of course, home building will not be profitable until existing home values return to levels which exceed the cost to build, and that won't be for some time yet - at least three years, probably longer. So, not only is there a "boom" coming for the value of existing homes, there is also a construction boom hiding in the numbers, waiting to reveal itself in due course.

Commodity investors have long held "buy low and go long" as a way to acquire gains in a volatile market.

I'm recommending a similar approach to any property you may currently own.

Just as this is the best time in decades to acquire investment property, this is also the best time to hold onto any property you currently own so long you can afford to do so.

The coming building boom also means that this is an excellent time to invest in open land, such as the farmland near existing housing developments. That's where the developers will be looking for land in the years ahead.

Short-term is only part of any investing strategy. Investing for the future, using education and insight is also a valuable part of our investing strategy.

Maintain a healthy balance in your investing strategy and in your portfolio. Invest for income now, but also invest in future returns.

We'll talk again soon!

Take care - be well!

Much Success!