I get asked a lot by friends: Should I sell my house?
Or: Should I delay buying a house, given how good the economy is?
The short answer is most certainly “No”.
If you need a house for personal use – keep on keeping it! Yeah, I am scared of property prices in Turkey, Canada, China, Australia but not in the US. Here is why… All you need to know about the US housing pricing outlook is that the Supply/Demand outlook is pretty healthy:
1. No overbuilt – inventory is well under control. (Figure 1)
2. Residential housing vacancy rate is very low. (Figure 2)
Although, by most indicators the recession is long overdue and very likely to happen in 2017, the US housing seems fine. Historically, US prices trended up non-stop, mostly ignoring recessions. The 2006-2008 was a big time anomaly. On the way to 2006, there was a huge overbuilt in the US housing. Currently, we are still seriously underbuilding in the US. Yes, as always, there many countertrends: students loans are hurting first time buyers, demographics is turning against home ownership, and people still have scars from 2006-2008. But a lack of excess supply would keep pricing relatively stable (with few regional exceptions – like oil producing areas). My bet is that given the lack of overbuilt in the US housing, the worst case is a stagnation.
P.S. Please, disagree! We know that the Real Estate is a highly local business, nation-wide aggregates matter only on the Balance Sheets of big banks.