It’s been a rough few years for real estate.
It’s taken real estate to the point where the industry is on the brink of collapse.
That’s a lot to swallow and we’re here to help you out.
First, let’s start with the fundamentals.
Real estate prices have dropped from their all-time highs in late 2016.
As a result, the real property bubble that started to pop back in March 2017 has been slowly dissipating.
As the chart below shows, prices are trending downward, and it’s unlikely that prices will rise until 2020.
Second, as long as the housing market remains relatively robust, real estate will continue to be the most important source of new supply in the economy.
And if you look at the chart above, that means there are three parts to the supply curve: First, there is the “real estate supply curve” that starts with home prices.
The supply curve starts at a low price point, and if prices don’t fall as quickly as expected, they won’t be able to keep pace with the rise in demand.
Second, there are the “new supply” sources of new construction, including office space and apartment buildings.
Third, there’s the “demand curve” of residential and commercial development, which is when the demand for housing begins to rise.
In the chart, you can see that the demand curve has been in a downward spiral for the past year, while the supply is continuing to grow.
That means that the number of homes in the market is on a downward trajectory, and the supply of housing is on an upward one.
And it’s not just home prices that are falling, either.
The price of other types of construction is also going up, particularly in the residential sector.
The housing bubble is going to collapse.
If you’re wondering why, this is exactly what happened when the housing bubble popped in March of 2017.
That bubble popped when the stock market started to bubble.
The chart above shows the housing supply curve going down in 2017, while new construction is growing at an annual rate of nearly 5 percent.
But we’re not done yet.
The chart below also shows the demand curves for residential and nonresidential construction, which are the two key sources of growth in the real-estate supply curve.
In both of these curves, there have been signs that the supply has been picking up and prices are finally starting to rise in a meaningful way.
That could be the reason why prices are starting to trend lower, but the supply and demand curves are still in a pretty precarious position.
The stock market will continue its downward spiral, and that’s a good thing.
In this week’s episode of Real Estate Investing, I’m joined by Jim Mears, chief investment officer at Mears Group, and Daniel Noyes, chief economist at the National Association of Realtors.
We discuss what the next big economic story might be for housing.
We also dive into a couple of new real estate trends that could have an impact on real estate prices.
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