BUCKLE UP!! It’s a BULL Market

Mar 27, 2013 | Securities

It’s a Powerful BULL Market

And it’s only just begun!!

Only two weeks ago we revisited the investment thesis for investing in US real estate. Right now US real estate is the cheapest it has been in at least a CENTURY and it is by far the cheapest real estate market in the developed world. Huge cash flows and significant discounts to replacement value are allowing savvy investors an incredible opportunity to buy their very own piece of “land of opportunity.” And what an opportunity it is right now!!  You can read the full article by clicking on this link.

Since then, the evidence of a bottom in US real estate has flooded in and now it’s safe to say that a potentially powerful new up trend has emerged. It is looking increasingly more evident now that US real estate is about to take flight. 

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On 19 March 2013, the numbers for US housing starts for February were released. The jump was HUGE. New US housing starts jumped an incredible 27.7% from 12 months earlier. US housing starts rose from  718,000 in February 2012 to 917,000 in February 2013.

On top of that, the number of “underwater” US homeowners, those homeowners who owe more on their mortgage than the value of their house, is decreasing at a steady clip. According to CoreLogic Inc, 19 March 2013, “about 200,000 US homeowners regained positive equity in their property in the fourth quarter of 2012 as prices rebounded from a 5 year slump.” According to Corelogic, 10.4 million or 21.5% of US homeowners with a mortgage remained in a negative equity position. This is down from 25.2% at the end of 2011 or 1.7 million. What was also of interest was that it will take a rise of just 5% from current levels for another 1.8 million homeowners with negative equity to move into a positive equity position.

Then there was this interview on CNBC from Stuart Miller, the CEO of US homebuilder Lennar. In the interview, Miller said the US were ” clearly in the midst of a recovery in housing” and the trend is “fundamentally strong.” He also mentioned that the US is fundamentally under-supplied and that homebuilders haven’t been building fast enough. Currently the US is building at a pace of around 500,000 to 600,000 annually. Miller believes that figure needs to be at 1.3 million per year just to keep pace with normal housing production and population growth. That is, US home construction is miles off where it needs to be before the under supply issue is at least maintained at current levels.  

This provides further evidence that a large supply/demand imbalance is starting to build. Here at UGC, we believe that this could mean that investors who position themselves soon, could potentially benefit significantly from natural demand for housing in the future.

Then on Bloomberg TV 20 March 2013, Doug Yearly, CEO of Toll Brothers, another major US homebuilder said ” We’re only one year into this recovery.” “Remember, we had seven of the worst years in housing that this country has ever seen. This recovery, we believe, should be a lot longer than just one or two years.” Remember, the US had ~70 years of uninterrupted property price appreciation after the Great Depression. He also said “We feel really good this spring,” “Our orders are up 49%”. He then went on to discuss how inventory levels are extremely low and how low inventory is one of the key ingredients in seeing higher home prices ahead.

Then on 21 March 2013, highly respected Stansberry & Associates investor and advisor, Dr Steve Sjuggerud, wrote in a note to clients “US housing is the greatest value it’s ever been in our lifetimes – and probably the greatest value it will ever be.” He then went on to write ” I objectively define value as affordability.” Affordability is a function of 1) house prices, 2) mortgage rates, and 3) income. The first two crashed to an epic degree, making US housing more affordable than ever.”  

RIGHT NOW, I can’t make it any clearer. I’m banging my hand on the table and slapping you over the head with it!!

Right now US housing is incredibly cheap. The cheapest we have probably ever seen a property market in the developed world. And it can pay YOU a small fortune in cash flow to own it. The trend has turned. It doesn’t get any better than this. You will almost certainly struggle to buy real estate anywhere in the developed world again in our lifetimes on terms as favourable as what they are today.

Get over your inhibitions and your fears. Get educated and get into it!!

You don’t have to make a huge investment. But you should make one!!

Don’t wait a moment longer. Call UGC today to learn how you can position yourself to profit from this very, very rare opportunity.

It wont be here much longer.

If you are serious about your wealth, then we encourage you to speak with one of our financial strategists today for a No Cost, No Obligation consultation on 03 8657 7640 or email info@ugc.net.au. We would be more than happy to review your wealth creation strategy and get your to where you want to be.

The information contained in this report is General in nature and has been prepared without taking into account your objectives, financial situation and needs.
<a href="https://ugc.net.au/author/joel/" target="_self">Joel Hewish</a>

Joel Hewish

Joel is the founder and CEO of UGC. He is a licensed financial advisor with 15 years experience assisting clients grow, manage and protect their wealth.

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