How To Make A Financial Killing From Today's Low Housing Inventory

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


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My Thesis On Rising Home Prices Continues To Be Validated

If you've been following my blog or Facebook page (https://www.facebook.com/TemeculaRealEstateandProperties/) you know I've been very bullish on housing.

It's Economics 101: Demand is rising and supply can't keep up. That's sending home prices higher.

New data on the housing market show that supply continues to tighten as housing prices are still on the rise.

The Case-Shiller Index – a measure of single-family homes across 20 of the country's largest cities – jumped 5.7% in June.

And as David Blitzer, managing director and chairman at S&P Dow Jones Indices told housing news outlet HousingWire, rising home prices don't appear to be slowing anytime soon.

The trend of increasing home prices is continuing. Price increases are supported by a tight housing market.

I agree.

Of course, as prices increase, homes become less affordable.

But today's housing market is far healthier than during the previous bubble in 2006, which was fueled by a glut of subprime lending that was destined to blow up.

Not so this time around.  

All mortgages written since the financial crisis are what's called 'Full-Doc Loans' meaning, full income verification based on the verified annual tax returns of borrowers.

Hope you have a great weekend and please call me if I can help you with anything at all.

Ken

951-760-3833
KenAHall@gmail.com

I'm Not Always Right But I Sure Do Love It When I Am!

My month's long prediction for still lower mortgage rates is continuing to be proven correct!  3.78%!  A new low for the year!!

I LOVE IT WHEN A PLAN COMES TOGETHER!

45292 Corte Progreso, Temecula 

List price: $479,000

Sold price:

* $505,000. NO APPRAISAL CONTINGENCY *

$26,000 ABOVE LIST PRICE!

Here's what we did:

• We knocked it out of the park with our marketing
• We created buzz prior to making the home available to show
• We put on an epic Open House
• We created multiple offers
• We created a bidding war
• We negotiated hard, squeezing the competing buyers for every last dollar
• And we got THE ONE buyer who would not be denied to step up and grab the brass ring for $505,000 ... plus waiving the Appraisal Contingency.

My Seller, Mr. Daniel Devine, is a Very Happy Client!

Would you like to sell your home for TOP DOLLAR?

Give me a call!


On Your Team,

Ken
951-760-3833
KenAHall@gmail.com


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Quote I'm Pondering ...

Quote I'm Pondering:

“You will fall. And when you fall, the winner always gets up, and the loser stays down.” 

-Arnold Schwarzenegger

THE REAL ESTATE BOOM IS NOWHERE NEAR DONE YET

I know what you're thinking... "The housing market has already been booming for a while now. How much longer can it go on?"

A lot longer.

The reason is simple: There's no supply of houses. (It's hard to believe... but it's true.)

With no supply, and a ton of demand, home prices can only go one way – up.

Let me show you how much supply is lagging even after a few years of this boom.

Total housing inventory has fallen year-over-year for 24 straight months, according to the National Association of Realtors.

Let's take a closer look at this idea and what it means for us today...

Here's a chart of the housing inventory – existing homes that are currently available for sale in the U.S.

As you can see, inventory hit a record low recently. Take a look...

I want you to notice something else on this chart... Inventory hit a record high in 2007 – at the peak in house prices ... and just before the you-know-what hit the fan.

The last time housing inventory was at a level similar to today's was in 2001. Back then, you wanted to be a BUYER of real estate, not a seller.

In short, you want to bet on house prices going higher when there's no inventory... And you want to bet on house prices going lower when inventory is at record highs.

Now let's quickly look at another number: new homes being built...

You'd think homebuilders would be taking advantage of the lack of inventory. You'd think they'd be building a ton of homes. But that's not quite what's happening yet...

After the big housing bust, builders stopped building homes. It has been nearly a decade, and the rate of building is still "below trend." Take a look...

Housing starts have increased dramatically from the bottom... But they're still below average. Building hasn't caught up with demand yet. And that has kept supply low.

Today, we have a small number of homes being built, and a record low inventory of homes for sale.

Based on that, I believe home prices will continue to rise.

Could something unforeseen happen that blows-up my thesis? Of course!

The brilliant Nassim Nicholas Taleb wrote a book titled, "The Black Swan: The Impact of the Highly Improbable" where he talks about just that, an unforeseen event (think 9/11) that completely disrupts the current world environment.

But there's no way anyone can really anticipate something like that with any degree of accuracy so ... as a (hopefully) rational human being, I'm putting my money on HISTORY and TRENDS based on HARD DATA.

And so ... I believe home prices will continue to rise.

Give me a call if I can help you in any way.

On Your Team,

Ken

951-760-3833

KenAHall@gmail.com

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