The real estate market is in for sharp correction with losses that could take a decade to recover from, strategist says
- A strategist says to brace for a steep correction in residential and commercial property prices.
- Chris Vermeulen says he sees a wave of real-estate distress on the horizon.
- Foreclosure activity could rise as the economy slows and unemployment edges higher, he says.
America’s property market is due for a correction.
That’s according to Chris Vermeulen, a longtime strategist who’s the founder of The Technical Traders. He thinks real estate is on the verge of a steep price correction, and he’s forecasting that both residential and commercial properties could soon experience a wave of distress, causing prices to plunge about 30% in both markets.
“People are going to have to start to sell their homes,” Vermeulen told Business Insider in an interview this week. “What we’re starting to see is people starting to realize they can’t afford their mortgages, or they need to downgrade. A lot of people are struggling financially, and this is really the tip of the iceberg. Give it another two or three years — that’s when the real-estate market gets hit the most.”
His forecast is among the more dire sounded by real-estate commentators in recent months. Most observers expect home prices to stay elevated over the near to medium term, but Vermeulen said the signs pointing to a big move down were beginning to add up, noting a weak backdrop for the US economy that could end up hitting consumers — and particularly, mortgage holders — hard.
The U.S. housing market is already entering a “crash stage” in multiple cities across the country, according to expert Nick Gerli, CEO and founder of real estate analytics firm Reventure Consulting.
Talking during a recent episode of the Thoughtful Money podcast, Gerli said that while the national housing market is still “in a record bubble,” with home prices significantly higher now than they were before the pandemic, many metropolitan areas are experiencing price drops on a month-to-month basis and even year-over-year.
“The housing market right now is very bifurcated,” Gerli said. “And we actually have many cities that are entering a crash stage right now. This is what the mainstream headlines on the housing market are absolutely ignoring.” Newsweek contacted Gerli for comment by email early on Thursday.
www.newsweek.com/housing-market-entering-crash-stage-multiple-cities-1920530