Economist issues stark warning about future of US property market
The US housing market is on the verge of a catastrophic crash, a financial expert warns of a looming real estate apocalypse.
Chris Vermeulen, founder of The Technical Traders, has issued a stark warning about the future of the US real estate market.
Vermeulen expects that both residential and commercial properties are about to drop significantly in value, with their value potentially dropping by as much as 30 percent in just three years.
“People will have to start selling their houses,” Vermeulen said Business insider this week. ‘What we’re starting to see is people realizing that they can’t pay their mortgage, or that they need to reduce their mortgage.
The US real estate market is on the verge of a catastrophic crash, according to a financial expert sounding the alarm about a looming real estate apocalypse.
“A lot of people are struggling financially, and this is really the tip of the iceberg. Give it another two or three years — that’s when the real estate market will take the biggest hit.”
The warning comes as Americans are already showing signs of financial trouble.
Retail sales have been unexpectedly weak over the past two months, rising just 0.1 percent in May, for example.
According to Vermeulen, this could cause a domino effect of lost profits for companies, which could lead to more layoffs and shorter working hours for employees.
“People are getting laid off because unemployment is going up. People are burning through their savings and inflation is insane,” he said. “Eventually, people can’t pay their mortgages.”
According to consultancy firm Challenger, Gray & Christmas, the number of jobs has already increased by 136 percent in January.
The expert predicts that unemployment could rise to a shocking 5 to 6 percent, leaving many Americans unable to make their mortgage payments.
But it’s not just homeowners who need to worry.
The commercial real estate industry is grappling with a staggering $900 billion debt crisis, with foreclosures already up 117 percent in March.
Vermeulen also predicts a drop in house prices of approximately 30 percent, both in the residential and commercial markets.
He warns that recovery could take up to ten years.
Chris Vermeulen has issued a stark warning about the future of the US real estate market, believing that both residential and commercial properties are on the verge of a steep price correction that could see values fall by as much as 30 percent in just three years.
“Real estate prices have doubled and tripled in the last few years. It’s pretty wild. And usually, when an asset goes up that much that fast, it usually comes back and pulls and corrects,” Vermeulen said.
“It’s a great opportunity for people who can recognize the soil.”
Vermeulen’s prediction is one of the most gloomy among real estate commentators, but not everyone shares this negative view.
According to the National Association of Realtors, low housing supply could keep prices stable for years to come.