Before we get into the many developments of late, a point of order: this newsletter will be on hiatus for the next couple of weeks. It's vacation time, and I will be beating the 114 degree heat for the cooler climate of Sweden. You may reach me via email while I am traveling, and my assistant will handle any showing requests in my absence.
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As this newsletter has covered many times in recent months, there's a major supply crunch looming -- not enough homes for a growing population. There's also no end in sight to the problem.
So, what's happening? How can homeownership sink while household formation increases? Rentals. We've got a nation of renters, and barring a major change in mortgage financing, that trend is unlikely to change.
The smart play is to buy single family homes that rent at affordable rates. Rental demand is likely to remain very strong, improving cash flows for the foreseeable future. And if the balance shifts from renting to buying, landlords can make a tidy profit on the sale.
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Attention Car Collectors
Off Market Private Listing
7 car garage: a 5 car air-conditioned garage, plus a separate 2 car garage. Also, there's an option to build another 3 car garage.
If you're a car collector looking for a home that can house numerous cars, you know that prices routinely run to many millions of dollars.
This exceptional 5 bedroom house on a quiet street in Paradise Valley also boasts a guest house, office, and gym. Offered at just under $1.6 million.
Excellent value here, please reply to this email if you'd like pictures when they are available.
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Bond buyers beware...
A lot of people have been lulled into a false sense of security by the recent bond rally. However, as rates get ultra low (or negative) the whipsaw effect is magnified.
Exhibit A...
24 YEARS of income lost in a bond market move that took just 3 WEEKS. Japanese rates are lower than US, but the US isn't far behind and the risks are comparable.
So those "safe" government bonds have a mountain of risk at these prices. Could you make money betting on them? Maybe so. But you can definitely lose a lot more than you can make. The mathematics are simple, and the risk/reward is deeply skewed.
Take advantage of the situation by refinancing all of your real estate. And be very cautious of "chasing yield" in the financial markets. | 