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larrywww

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Reply with quote  #1 
Fred Foldvary is a PHD who predicts a depression in 2026 based upon 18 year cycles between depressions (like in 2008)


He believes that the current real estate boom will end in 2024---and that there will be a depression in 2026.

His current conclusion is that:

he US real estate market is not yet in bubble land. Some 15 percent of houses still have negative equity.

The US real estate market is not yet in bubble land. Some 15 percent of houses still have negative equity. But the policy of US governments has been relentlessly to promote home ownership, and most likely the US and state governments will provide more guarantees, low rates, and other subsidies to lower-income first-time buyers. . .

None of the financial regulations and diversification mandates will stop the real estate boom of 2012-2022. The 18-year cycle is still on track, which will most probably plunge the economy into its next depression in 2026, 18 years after the Depression of 2008.

 https://www.progress.org/articles/the-depression-of-2026

By 2014, population growth and demolitions will have reduced the vacancies from the construction bubble, and then the growing economy will pull up rents and land values, attracting the speculation that will generate a ten-year real estate bubble that will peak around 2024.

Since Bruce hasn't made a bubble prediction quite yet---what is your opinion of his prediction?

Greg

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Reply with quote  #2 
It seems silly.

We could have world war 3 - or some fantastic new economic development in that time. Who knows?

If only the world ran in a vacuum.

Meanwhile - I can't see anything that will create an immediate bubble here locally.
rickencin

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Reply with quote  #3 
The problem with predicting the future is that newer information is always coming along.  By Dec. 31, 2023 we should have a pretty good idea of what Jan. 1, 2024 will be like.  Predictions will get evermore accurate.  As has been mentioned before, bubbles are often caused by credit bubbles.  There doesn't seem to be a housing credit bubble coming into view. 
Well, Social Security, Medicare and Obamacare could rack up some really big debts which is sort of like a credit crisis.  All of us AARP members who paid in for decades are darn well going to collect, even if the money has all been spent, or some politicians are going to lose their jobs.  Pay for the future -> Pay as you go -> Pay as you went -> Blowups happen.

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brycewheeler

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Reply with quote  #4 
I think Fred Foldvary's prediction of the real estate cycle is pretty reasonable, give or take a year or two on either side due to a few unknown gray or black swans.

The price upside should hold steadily upward for both California and the nation as a whole for a few years at least IMO.

But remember, as Yogi Berra said "Predictions are difficult, especially of the future."

Bryce
larrywww

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Reply with quote  #5 
What I find somewhat interesting about his predictions is that he appears to believe in alot longer cycles than Bruce---Although he goes all the way back to the previous century for data.

But his data set is rather strange---some of his cycles are 47 years long---some as short as 6 years.  And these are the patterns in this century, as opposed to the previous century.

Another person looking at a cycle that is 6 years long---but could be 47 years long---might come to the conclusion that you can't really predict how long the cycles will be.  I think I find this conclusion equally compelling.

Another question: Why was there no crash after 1925 until 1972?----the 47 year old cycle.

And is the 18th century data even relevant?   California was a very different place then.

I can sort of see why there were historical factors after World War 2 why California was so attractive---the job market, all the military bases (we lost some of those later), all the defense contractors, etc.

In conclusion, I don't believe he has proven his case, though I don't find it implausible that it might take this long (2024) for the current market to reach a crash.

I wonder what Bruce would think?

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