Nomi’s Note: Today, I’m handing the reins to my colleague Phil Anderson.
As a master forecaster, Phil is not the type of guy who makes predictions lightly. And his incredible track record speaks for itself.
He forecasted the dot-com bubble, the 2007 stock market peak, and even the March 2009 low of the Great Recession…
In 2018, before Covid was a blip on the radar, Phil predicted a short-lived downturn followed by a profitable 18 months…
And in 2023, when every expert called for a recession, Phil said there’d be no recession… and that stocks would hit new highs.
It all happened exactly as he said. And tomorrow at 11 a.m. ET, he’s going on camera with his next big prediction (instantly register here).
Until then, read on to learn more about the 18.6-year cycle Phil follows to make such accurate calls…
Who would have thought the 18.6-year real estate cycle and a volcano in the middle of the Pacific Ocean have so much in common?
At first, most people would see none whatsoever.
Yet again, the advantage of knowing the real estate cycle is that it allows you to understand what’s truly happening in the world.
And in particular, why the timing behind this is so important.
So, what are we talking about here?
A recent Wall Street Journal article explains…
If the smell of sulfur and views of black molten slag is what gets you up in the morning, then this deal is for you!
From the above article… (emphasis is mine):
In 2018, a large volcanic eruption spewed lava, rock, and ash into the middle of a subdivision in Puna, in the Eastern section of Hawaii’s Big Island. It gobbled up more than seven hundred homes and displaced thousands of residents. Today, it is Hawaii’s fastest growing region.
The last time I looked, Hawaii still holds the title of the most expensive state in the U.S.
And so, suburbs like Puna represent the last vestige of reasonably priced land left.
Globally, Hawaii is a renowned tourist mecca. And given that it’s an island, most of the best locations have been maxed out with high-rises and multimillion-dollar properties.
However, you just need to go back to the 1960s to see evidence of just how much interest real estate here garners amongst investors.
Boosted back then by a tax revenue-hungry county government, speculators flocked to areas like Puna which led to thousands of acres being subdivided and sold off.
Incredibly, the rules surrounding these sales meant the buyer had no need to build any supporting infrastructure like paved roads, wastewater treatment facilities, schools, and hospitals.
And those issues remain largely to this day.
Ironically, most of these problems have been resolved thanks to lava flows overrunning those same houses. So, what would motivate people to run the risk of building at or near an active volcano?
Here is where knowledge of the 18.6-year real estate cycle really does place you way ahead of the crowd.
People Really Don’t “Want” to Buy Here!
What’s happening in Puna was totally forecastable well before now. As well as the ultimate outcome.
What happens at this stage of the cycle has occurred for more than two hundred years of U.S. land market history.
Land gets so expensive in the most desirable locations that people must leave the big cities and move farther away from their own work or children’s schooling just to be able to afford to put a roof over their heads.
Which means that regional areas or land on the margins suddenly attracts most of the buying.
And that means areas like Puna are now the fastest-growing regions on the entire island.
So according to the real estate cycle property clock, the combination of easier credit and the migration away from the most expensive suburbs out to the margins should be happening now.
Given the choice, no sane person would ever live here. Ironically, as all the available land gets brought up by overseas investors looking to speculate, it’s the working-class residents who today cannot afford to live in their own town.
More from the article:
Rising prices have left Puna native Chantel Takabayashi feeling stuck.
She would like to buy a home close to her work…and better schools but has been priced out of most neighborhoods she has considered.
“I work long hours, endless hours, and I still can’t afford better housing.”
More proof, not that I needed to see it, that the cycle continues to turn on time.
Make no mistake, you all know by now how bullish I am on the U.S. stock and housing markets for the next few years.
Indirectly, what’s happening in Puna is simply feeding that trend.
But you must understand the key drivers of the economy if you ever hope, like Chantel above, to move from a renter to an owner.
That way, you can invest with these powerful trends rather than against them. This is exactly what I teach and guide my members to do.
So what is the ultimate fate of these brand-new buyers in Puna a few years from now?
How many years can the good times last for them?
Join me at an exclusive event tomorrow at 11 a.m. ET, where I’ll explain exactly what’s coming… and how you can profit and prepare.
Contributing Editor, Inside Wall Street With Nomi Prins