2 Reasons Housing Is The Investment Of The Decade

When was the last time you looked at home prices? Or checked the value of your house on sites like Redfin or Zillow?

For the last year, I’ve said housing would go up. I got a lot of flak for that.

Still, even I was surprised when I checked what my house could sell for. I have no intention of doing so … I was simply curious.

Housing prices are seemingly out of control. But there’s still a massive opportunity for profit.

So why is the hot real estate market only going to get hotter?

Let’s have a look at two of the bigger tailwinds…

TAILWIND NO. 1: SURGING DEMAND

Demand far outweighs supply in real estate right now. A home in Sacramento recently sold for $100,000 over its listing price … after receiving 122 offers!

No matter the market, when demand is up and supply is down, smart investors can get very, very rich. It’s Economics 101.

From 2002 to 2008, for example, the global economy grew rapidly, especially in emerging markets such as Brazil, Russia, India, and China. This created demand for industrial materials such as copper, steel, and aluminum. But there wasn’t enough to go around.

Like clockwork, top mining companies jumped off the charts. Rio Tinto went up 505% … BHP went up 600% … and Vale S.A. went up 1,610%.

The same dynamic is at work in today’s real estate market. In the same way, those mining companies handed investors triple-digit (and more) gains, housing-related stocks will do the same.

All this demand is coming from millennials.

At 72.1 million, they’re the largest generation in U.S. history. They’re storming into their homebuying or upgrading years.

According to the National Association of Realtors, 1 out of every 4 homebuyers in 2019 were a millennial household. That’s more than any other demographic. And that proportion almost surely increased in 2020.

Another recent report from Realtor.com said millennials now make up the largest share of loan applicants — nearly half!

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But if you’re looking for a more specific way to play it, make sure you check out the special reports I put together for my Bauman Letter subscribers. If you’re not a ...

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Paul McPherson 4 days ago Member's comment

Not everyone thought it would happen, but when you look at it, it'd be surprising if it did NOT happen. First, you've had a wave of pent-up demand after the lockdown, and then, there was another lot of demand coming from urban renters who are looking for houses to buy in semi-rural locations; I was informed by tranio.com last year, as I've been following their articles for a while now, and they didn't fail to deliver.