MACRO - Housing Double Bottom
Model Forecast for the Housing & Real Estate Market:
Synopsis:
Underlying Conditions:
Federal Deficit:
Debt needs to be paid. Household Debt Payments have bottomed.
Household Debt Service Payments as a Percentage of Disposable Personal Income (TDSP):
Business Inventories will fall:
Housing Starts are falling, and can fall much lower before recovery:
Housing Sales have very little business rising and will certainly fall:
Supply:
The price of lumber is at a top and will certainly fall by EOY:
The supply of labor will increase - Employment has downside before recovery:
Capacity Utilization has some downside:
Demand:
As real estate investors who bought the bottom in 2020, who have have enjoyed several 100% unrealized gains decide the real estate bull market is over, they will clean up house and leave retail holding the bag on the now worthless assets. Of course, at this time, banks will be accumulating them at the bottom to prepare for the next bull market!
Targets for REIT Campaign:
EQR - High-Value Residential:
BDN - Suburban Offices - WFH culture is here to stay, and the demand for office-space will greatly decrease:
RYN - Timberland Real Estate & Lumber - Double exposure to both lumber and Real Estate:
SLG - Manhattan Commercial - I expect financial disruption as well, and the high value real estate there will crumble like a house of cards:
Watching:
Warehousing - Due to pandemic shipping backlog, warehousing real estate should see a boom, but as 3D printing & AV shipping improve, they will become fantastic short targets, as they become obsolete!
GLHF
- DPT
Synopsis:
Underlying Conditions:
Federal Deficit:
Debt needs to be paid. Household Debt Payments have bottomed.
Household Debt Service Payments as a Percentage of Disposable Personal Income (TDSP):
Business Inventories will fall:
Housing Starts are falling, and can fall much lower before recovery:
Housing Sales have very little business rising and will certainly fall:
Supply:
The price of lumber is at a top and will certainly fall by EOY:
The supply of labor will increase - Employment has downside before recovery:
Capacity Utilization has some downside:
Demand:
As real estate investors who bought the bottom in 2020, who have have enjoyed several 100% unrealized gains decide the real estate bull market is over, they will clean up house and leave retail holding the bag on the now worthless assets. Of course, at this time, banks will be accumulating them at the bottom to prepare for the next bull market!
Targets for REIT Campaign:
EQR - High-Value Residential:
BDN - Suburban Offices - WFH culture is here to stay, and the demand for office-space will greatly decrease:
RYN - Timberland Real Estate & Lumber - Double exposure to both lumber and Real Estate:
SLG - Manhattan Commercial - I expect financial disruption as well, and the high value real estate there will crumble like a house of cards:
Watching:
Warehousing - Due to pandemic shipping backlog, warehousing real estate should see a boom, but as 3D printing & AV shipping improve, they will become fantastic short targets, as they become obsolete!
GLHF
- DPT
Comment:
REIT and Real Estate trades should be exceptionally rewarding on both pivots, should my model be correct!
Trade active:
The time has come.
