Another Reason the Real Estate Market Is Going To Crash
I have written how the real estate market will crash because of:
- demographic collapse
- natural and created disasters
- VAXXX and pandemic deaths
- Wars, both civil and uncivil
Basically, demand for suburban housing is going to drop and drop and drop.
There is another, hugely impactful, thing happening.
Something that will have real estate investors running for the doors, and dumping huge amounts of real estate on the market. Something even bigger than the housing crash of 2008.
And that huge thing, is bitcoin.
Real Estate Investment ROI goes DOWN!
With the economy being in recession (if they measure it as it used to be), meaning people have less money to spend on things, like rent. And interest rates having gone up. The plans of most real estate investors have been thoroughly trashed.
Most investors buy on increasingly tight margins. Expecting rents to be able to be raised each year, until the are comfortably cash flowing. But, what happens when you have run into a situation where you can't raise the rent? Where, people have, and are, just moving out and living in a tent. So, these investors are finding themselves, their plans gone awry, now greatly in the red.
Real estate investors are barely making it, if they are making it at all.
And the future prospects look bleak.
Bitcoin go up
Over the same time, bitcoin has gone up. And bitcoin looks like it is going to go up more. Much more.
Compared to real estate, bitcoin has had a MUCH higher ROI. To make matters worse, renting homes is a pain. Fixing everything that breaks, uncloging the toilets on a Saturday night, and finding/keeping good tenants. That is a lot of work. On the other hand, bitcoin just sits on the blockchain without any need for you to do anything.
So, bitcoin has higher returns, and lower time costs. Why doesn't everyone drop real estate and switch to bitcoin?
What happens when investors ditch real estate?
If real estate was as easy to get into/out of as stocks, then everyone would have dumped their real estate investments, and jumped into bitcoin. However, they are not easy to get out of. Black Rock's REIT (Real Estate Investment Trust) has a waiting list of people who want to get out.
And now, real estate investors are stuck. Higher interest rates, slower economy, and few qualified buyers make selling real estate difficult and slow. Further, to get any lookers at all, one needs to slash the price.
If all the real estate investors try to unload their portfolio, the prices will drop so hard, that everyone will be in bankruptcy. The investors are really stuck. They can continue on, as is and hope for things to get better, or go bankrupt. Still, for some large investor groups, getting 75% on a property is better than nothing. Get whatever money they can out before declaring bankruptcy. And so, some will try it, and then the market collapses, as everyone runs for the exit.
Bitcoin is looking like a far better investment than real estate.
Especially if you look at everything as it really is.
Houses go up in price via money printing. (each mortgage is printing more money) And so, housing has been keeping up with real-inflation.
On the other hand, bitcoin is real money. There is very little inflation. Instead of doing risky investments, all you have to do is hold bitcoin.
So, real estate investing was a way to keep up with inflation. And was a good investment because of the tax structure. But, this was only while housing demand was kept up. Now demand is dropping, and will drop massively.
If you are invested in real estate, choose now, sell everything at massive discounts to get them sold, or ride your portfolio into the ground. (both have there advantages, but do not expect any recovery.) Suburban real estate is going to drop so far that you will have to pay people to unload it. (below zero)
And, in the future, housing will not be seen as an investment. It is your biggest expense. It is falling apart around you, and requires a lot of maintenance. Of course, keeping a roof over your head is important, however, we will never see real estate as a market, ever again. It is not an asset that goes up in value.
Bitcoin is where people will store their wealth. Real money conserves its purchasing power. And saving your bitcoin is almost as easy as doing nothing. (If you have a large holding, i strongly suggest your support the network with a full node. And of course, make sure to keep your seed phrase safe and secure)