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Real Estate into 2023

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QUESTION: Marty, at the Orlando WEC, I asked you if your real estate forecasts for residential included condos. I believe you said no. I bought a house when your index elected a monthly bullish reversal in June 2020. Everything seems to have doubled since. Do you think your forecast into 2023 is influenced by the excessive spending of Biden?

Thank you.


ANSWER: Yes, this is the single-family home index. It does not include commercial real estate or condos. It is always a combination of influences. It appears that Biden has provided the straw that broke the back of deflation. Central banks have been engaging in Quantitative Easing since 2008 without success. This has been largely caused by the collapse in confidence in the future. When people fear the future, they save. Increasing the money supply does nothing until the people decide to spend it.

One of the factors that confirmed to me that we would be heading into progressive inflation long-term was the fact that this Residential Index elected a Yearly Bullish Reversal at the end of 2012. That confirmed the long-term trend had changed. However, urban condo and commercial properties were forming a divergence. I assumed that was being caused by the debt and rising taxes in cities. In that regard, I suppose I was only partially correct, for the rest has been the brain-dead response to COVID.

For example, locking people down and causing them to lose jobs has resulted in a sharp rise in violence. Not just mass shootings, but all sorts of conflicts from domestic disputes to outright feuds. Cities, such as Philadelphia and New York, have sections in which the police have totally lost control. It is debatable if they will ever be able to restore civility to these regions. While Fauci claims to ignore the Constitutional violations, his agenda in helping Gates and Schwab is more than simply preparing society for the Great Reset. He is furthering the collapse of urban civility and this trend is part of what is driving this index.

I would expect to see this escalate and if we make a new high on this index and close above last year’s high, single-family homes outside of urban centers will rise sharply into 2023.