Forecasting the direction of real estate prices requires the same disciplined approach as for other goods and services. Here are three reasons why commercial real estate supply exceeds market demand, and the implications for your clients and their REIT investments.
Nearly all analysts who write about the housing bubble have focused on the purchasing madness that occurred. While this is important, it overlooks the refinancing insanity of 2004-2007. This refinancing lunacy will devastate mortgage and housing markets for years to come.
Over the last 7.5 years, the Case-Shiller national home price index has increased 24.9% on a cumulative basis. But I have argued in numerous articles that that figure is grossly overstated. A new RealtyTrac report supports my claim, and shows the actual number is only 16%.