So, You Still Think Your House is a Good Investment

Think again!  As Mr. Armstrong highlights, housing as an investment is a scam. It is used like Financial Repression and inflation targeting to reduce your purchasing power, and is just another fraud perpetrated by the govt to transfer your money to them. Just wait until they remove the mortgage deduction.

 House 14000

“The American Dream and the pushing of home ownership is one of the biggest scams the politicians can pull off. The above home sold for $14,000 in 1956. Today, the property taxes are $10,000 annually. If you sell it today for even $200,000, the IRS looks at the difference as profit – not inflation. Then they do not consider the property taxes. Over the course of 50 years, the amount of taxes paid consumes whatever gross profit the IRS claims you made. So just where does owning your own home pay? The greed of politicians knows no bounds and people wonder why the standard of living is declining not rising.” — Martin Armstrong

Total Housing Starts and Single Family Housing Starts

Housing starts, currently driven by multi-family demand (and many in the mini-apartment segment), will only be constrained by the flow of foreclosed houses the banks decide to release to their REIT partners for pennies on the dollar.

Household formations will continue to struggle under the demographics cycle and stagnant incomes. As more multi-family units come to market, and interest rates start to rise, single-family home prices will decline.

Over the next few years, if interest rates stay contained, house prices could continue to push higher as capital continues to flee Europe and Japan. However, as the new supply of apartments hits the market and unemployment begins to increase by 2016, house prices will begin their next leg down, as they chase declining real incomes.

Since govt will not accept their required contraction, you can expect property taxes (along with other taxes, fees, penalties, and NSA surveillance) to increase as politicians become more desperate to hang on to their power and perks.

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