I've been saying it for a long time … most recently here …
https://www.linkedin.com/pulse/real-estate-boom-nowhere-near-done-yet-ken-hall/
"U.S. New Home Sales Soar to Highest Level in a Decade," USA Today reported last week.
"New Homes Sales Growth Surges to 25-Year High," the Wall Street Journal said.
So which is it? Are new-home sales the highest they've been in a decade... or in 25 years?
It turns out, the answer is BOTH...
The number of new homes sold last month reached 667,000 – the highest level since October 2007, a decade ago, during the last housing boom.
Looked at another way, though, new-home sales jumped by 18.9% – the highest monthly sales growth in 25 years.
Why did so many new homes sell last month? The hurricanes likely played a part.
But to me, the big factor in the housing market is the low supply of existing homes for sale.
It's Economics 101 – when you have no supply and a ton of demand, prices go higher.
Specifically, housing supply is measured in months – that is, how long it will take for the existing inventory of houses to sell at the existing rate of sales. Right now, we're sitting at 4.2 months of supply.
It is rarely lower than this... In fact, over the last 20 years, it was significantly lower only once – in early 2005. That was during the final years of the last great housing boom in the U.S... And house prices REALLY soared after that.
I expect the low supply today will create a similar effect – dramatically higher home prices.
The average sale price of new homes hit an all-time record last month, at $385,200. The median price for new homes was $319,700.
Keep in mind, new homes are only a fraction of the housing market. And the average home price is always higher than the median home price... For comparison, the median price of existing homes sold last month was $246,800.
But with scarce supply, that means we have plenty of upside ahead.
Higher house prices have been part of my big theme for the last two years... Since then, I have said:
Interest rates will stay lower than you can imagine, for longer than you can imagine... And that will push asset prices, like stocks and real estate, higher than you can imagine.
The "Melt Up" is arriving in stocks, driving stock prices to new heights as the bull market enters its final phase. And now, the boom time is arriving in the housing market, too...
Trust me on this: Barring a 'Black Swan' event, the real estate market will stay strong for years to come.
Give me a call if I can help you in any way.
On Your Team,
Ken
951-760-3833
KenAHall@gmail.com
www.KenHallProperties.com
Temecula Valley Real Estate Specialist
BRE 01418440
My Client, Dan Devine, saved over $5,000 in commission fees AND I sold his Temecula (Redhawk) property for $26,000 ABOVE List Price ... setting a new all-time high for Redhawk properties in a 200-home radius of his property.
Oh, I also represented Dan in purchasing his replacement property in Carlsbad ... negotiated hard and acquired his new property for $40,000 UNDER asking price.
Dan's pretty happy :) Here's what he had to say ...
*******
Ken did an OUTSTANDING job for me in both the sale of my home in Temecula (Redhawk Community) as well as the purchase of my new property in Carlsbad.
Selling and buying at the same time is a very daunting task, but Ken was there every step of the way with me and made the entire process go smoothly and as stress-free as possible.
Not only that, Ken was able to maneuver both of my escrows in order to get both of them to close one week early which was desirable for all parties.
My Temecula house was on the market only 4 days until the offers started pouring in. He and Dillon held an open house over that first weekend and they had over 70 people through to view the house. Ken's marketing and pre-marketing work were phenomenal and really created buzz and excitement for the open house.
The house was listed on a Thursday, and the professional photography and videography showed the house in a phenomenal way on all of the listing sites. He built up anticipation by waiting for the first Saturday to offer any showings. The house was full with almost no breaks in-between traffic on both Saturday and Sunday’s open house.
On Monday, we had multiple offers to review, then Ken went back to the buyers asking for 'highest and best' and waiving of the appraisal contingency.
Ultimately, we ended up accepting an offer for $26,000 above the asking price, and yes, the buyer waived the appraisal contingency!
Ken's the best negotiator and real estate agent I've ever dealt with. He really knows his stuff, and he knows the market very well. I am confident in saying to put your trust in him and he will deliver over and above your expectations.
Ken always answered his phone and returned texts promptly, and he always had an answer to any question or concern that I had.
I hope I will not have to sell and buy a home anytime in the near future, but if I do, Ken will be there with me every step of the way!
Dan Devine
**********
Would you like to sell your home for TOP DOLLAR? And Save Thousand$ in Commissions?
Give me a call!
On Your Team,
Ken
951-760-3833
KenAHall@gmail.com
www.KenHallProperties.com
*********
My last article made the case for why, 'The Real Estate Boom Is Nowhere Near Done Yet.' If you missed it, you can see it here …
https://www.linkedin.com/feed/update/urn:li:activity:6317772816196476928/
Today I'm going to reveal, 'How To Make A Financial Killing From Today's Low Housing Inventory.'
Warren Buffett, Sir John Templeton and Jim Rogers are three of the most successful investors of all time. They all came from modest beginnings and they all became billionaires because they bought stocks when everyone else was afraid to.
You may have heard some of the axioms that are in line with their investing philosophy:
- 'Buy when there's blood in the streets.'
- 'Buy when a stock (company) is cheap and hated.'
- 'Be greedy when others are fearful and be fearful when others are greedy.'
Some believe the real estate boom of the last few years is getting a little 'long-in-tooth.' But I'm here to tell you the biggest gains (PROFITS) are still to come.
So I present to you:
How To Make A Financial Killing From Today's Low Housing Inventory
The answer is:
HOME BUILDER STOCKS
The housing market is booming. But there's no supply. There's no inventory. This means the boom will continue.
And again, if you think I'm crazy, check this out before passing judgement:
https://www.linkedin.com/feed/update/urn:li:activity:6317772816196476928/
What we have is the perfect setup for homebuilder stocks to skyrocket over the next two-plus years.
It's a trade with incredible upside potential, based on history. In short, when the home building sector gets going, hundreds-of-percent gains are possible.
GET THIS: The biggest home builder stocks rallied 419%... 2,631%... and 776% during the last three big bull markets. And the uptrend is getting started again TODAY.
It's as obvious as it gets. And incredibly, nobody is in on it – yet. But you can take advantage of it by getting in on the ground floor right now by buying the iShares U.S. Home Construction Fund (ITB).
In 2013, the iShares U.S. Home Construction Fund (ITB), the main homebuilders exchange-traded fund (ETF), had over 100 million shares outstanding. Today, that number is less than half of that – below 50 million shares outstanding.
ETFs like this one can create and liquidate shares based on demand. So a falling share count tells me that no one is in this trade. No one is buying home builders. Yet.
See for yourself:
There is real value in these companies right now. After years of a housing boom, you'd expect home builders to be expensive. But they aren't.
ITB's top five holdings are the five major home builders in the U.S. (DR Horton, Lennar, NVR, Pulte, and Toll Brothers). They make up 43% of the fund. Surprisingly, these companies are trading at a big discount to the overall U.S. market. Take a look...
And the latest data shows home prices rose again in July as the supply and demand imbalance continues.
Home prices in 20 U.S. cities climbed more than forecast in July, reflecting solid demand against a backdrop of modest listings of properties, figures from S&P CoreLogic Case-Shiller showed Tuesday.
Buyers are competing for a limited number of for-sale homes, allowing sellers to boost asking prices … (NOTE: My last listing in Temecula's Redhawk Community closed two weeks ago for $26,000 over list price).
Home prices may also get a boost in coming months after hurricanes Harvey and Irma reduced housing supply in parts of Texas and Florida and will thus, create greater demand for home building materials.
So we have a sector that is completely ignored by investors... is cheaper than most stocks right now... and has a history of massive booms. This is perfect.
Watch the share prices of the home builders and the share price of the home builders exchange-traded fund (ITB) over the next two-plus years.
Don't miss out on the fun and profits. I'm convinced triple-digit gains are less than a couple years away.
Give me a call if I can help you in any way.
On Your Team,
Ken
951-760-3833
KenAHall@gmail.com
www.KenHallProperties.com
BRE 01418440
