Home prices have rocketed to record highs – and signs point to more gains.
Property owners have been dancing to a bull market for 10 years now – and when the music finally stops, many are going to find themselves without a chair.
Housing prices could plummet during the next downturn – so this is no time to be complacent.
Then and Now
Like now, California housing prices were booming in 2005 – and when I spoke before a San Diego real estate investment club that year, I predicted CA home prices would fall by 43% during the next correction.
There were over 400 people in the audience – it was standing room only – and most of them thought I was crazy.
But I was close. From the peak of the market in 2006 to to the bottom in 2012, the median home price in CA fell by a staggering 55%.
What Could Turn this Bull Market
into a Bear Market?
It could be higher mortgage rates, a recession, the War in Ukraine – or it could be something completely off the radar that nobody even sees coming right now.
As presented in my book Timing the Real Estate Market, that’s why I suggest you should stay focused on a handful of key housing indicators that are historically well-correlated with price movement.
These key indicators act like a canary in a coal mine.
If the housing market is going to turn down, there will be warning bells going off ahead of time. So if you are interested in securing a chair for yourself beforehand, I recommend you watch them.