‘Oracle of Wall Street’ sees years of declines in home prices

Meredith Whitney, observed that “Oracle of Wall Street” for calling the financial crisis right, he says house prices are due to drop significantly, and the reasons are related to the habits of young men.

“You have men who are staying single for a long time … and then you have what I call the problem of young American men … they are more likely to stay at home than women. So, one in five young men are living at home with their parents, and these are not young men who go to college and come home for the holidays, these are young, old people who are choosing to stay home,” Whitney. he said CNBC this morning.

The results could have a big impact on the housing market, he said.

“I think you’re going to start seeing home prices begin to decline over the next several years/decade, because of increased energy/demand,” Whitney said. “So you’ve had a demand, a supply imbalance: more demand, less. And I think that’s going to change.” So that means supply will outstrip demand, and that’s why he’s seen home prices drop over the years.

Whitney’s take on the role of social change. Most of the houses are owned by individuals and families over the age of 40, he said. But home design is the lowest it has been in more than a century, which translates into a fundamental problem, he said today.

However, many experts have predicted that house prices will continue to rise from here. Interest rates hit a decade high last year and people are still buying homes – and for good reason there are not enough houses, demand outstrips supply, keeping housing prices high. Whitney, however, calls it differently as home change, and apparently among young adults, occurs. It is not clear which data they are referring to here or what is above.

Whitney said that the all-time low interest rate “inflationary rate, especially the housing boom,” has driven many people out of the market. “If you’re single, the chances of you being able to buy a home on your own are less than if you’re a two-income couple,” Whitney said. Then, he goes on to say that homeowners have more wealth than non-homeowners.

Whitney is we talked for a long time A “silver tsunami” is set to destroy the housing market as children grow up and their homes are vacated. “You’re going to see significant change,” the founder and CEO of Whitney Advisory Group said earlier, repeating what he said today.

“You usually think that when prices go up, home prices go down, and that hasn’t happened in the last two years,” he said. “I think home prices are going to be normal because more inventory, more inventory is coming to the market, you’re going to see lower prices that are lower than today. So I would say 20% lower than today.”

Home prices rose 6% in January; most people think they will keep going up. Goldman Sachs predicted prices at home will rise 5% this year and 3.7% next year, in January. Capital Economics predicted that house prices would rise by 5% this year, in March. CoreLogic predicted to increase by 3.1% this year (from Feb. 2024 to Feb. 2025), this month.

At the end of last year, Whitney said that 51% of people over the age of 50 should downsize to a small house, citing an AARP report at the conference, and it will bring more than 30 million houses to the market. An oversupply, or better said, a supply that exceeds demand, can cause housing prices to fall.

However, this “silver tsunami” theory has been widely criticized. A recent analysis from Freddie Mac revealed that the 9 million homes that are expected to come on the market in the next decade as baby boomers will not disrupt the market, for one, because the younger generations will enter at the same time – meaning that the demand for housing will continue to rise. . The Freddie Mac report said: “But as this study shows, the tsunami is like a wave, causing a gradual outflow that can largely be offset by new arrivals.” Additionally, Eric Finnigan, Vice President of Demographics for John Burns Research and Consulting, he recently said Chance that offspring will not destroy the market because they are strengthening it. His team found that it takes about four deaths to equal one house sold (because a friend can hold onto it, or it can be passed on to children). The number of homes sold due to death is rising, and will continue to rise, but “it’s not a flood,” Finnigan said. “It’s not the number of houses that are being sold because of all these children that are dying.”

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