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Status of the US Real Estate (March 2020)

This post is also available in: French

Excerpt from: “Crystal Ball for Investing and Trading” Book.

Status of the US Real Estate Index

To analyze the state of the US real estate, we use the TC2000 MG440 Real estate index. Figure 13.23 shows a 9-day chart of the US real estate from 1988 to March 20, 2020.

After a correction in 1990, the real estate started a prolonged rally until Q1, 2007. It made an all-time high of $821.87 on February 8, 2007. Since then, it surpassed its previous top to achieve a historical top of 888 on February 21, 2020. Meanwhile however, the index has made a 38.2% nosedive to 548 points on March 20, 2020 within a month.

With the subprime financial crisis and the financial market deflation and depression of 2008, the Real Estate bottomed with a price of $148.28 on March 6, 2009. The crash represented a loss of 82% from its top. Since then, the real estate was re-inflated through the Fed successive QE programs in the US and in the world.

The interest rate is predicted to remain very low because (1) the colossal US debt of over 23 trillion should remain serviceable and (2) the President Trump’s wealth is invested in real estate.

Regardless of politicians and central bankers’ will, the US real estate is predicted to crash from February 21, 2020 in line with the Dow Jones subwave E (or Grand Super Cycle degree wave 4) until November 9, 2022 or October 21, 2021.

The real estate prices should find bottom most likely in the price area of Q4, 1990, below 100 points.

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