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It truly is the most wonderful time of the year, not only because of the holiday spirit, but because of the sector leadership movements.

Last week saw the real estate sector surge and capture the one-week leader position. I don’t think it’s just because people were home for the holidays, either.

Instead, I think it’s a sign that we are heading into a speculative bubble in 2025 - quite possibly one for the record books. 

Check this out…

Rates Will Revamp Real Estate

The recent developments in the tale of the tape offer a good reminder that everything in markets is connected. I like to call it the Principle of Interconnectivity, and it extends well beyond just what’s happening in stocks.

In this case, I’m referring to the recent rally in the bond market. I’ve been very vocal in Theo chat about how I’m expecting interest rates, specifically on the long-end of the curve, to drop notably into next year.

And I think this has the potential to grease the skids on a residential real estate market that’s been spinning its wheels over the past couple years - and don’t even get me started on commercial real estate.

If housing prices start to accelerate higher again, I think it will have a big impact on the way people spend. Keep in mind that home values are basically a leveraged investment for the average individual, even if they don’t realize it.

Plus, the average individual is more connected to their home than their stock portfolio. The end result is that this will add more fodder to the inflationary explosion that will come at some point in 2025. But first, we’ll need to see a collapse in crude oil prices - I don’t think it’s that far away.

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