Reasons Not to Buy Now

The pendulum this year has swung violently towards the camp of greed, and the fear of missing a huge housing/stock rally. The spring/summer season seems to be coming along decently. But, how about some reasons why things will reverse? Yes, global markets are heavily manipulated, and everyone is saying this time is different b/c of inflation, but as Twain quotes "history doesn't repeat itself but... [more]

The pendulum this year has swung violently towards the camp of greed, and the fear of missing a huge housing/stock rally. The spring/summer season seems to be coming along decently. But, how about some reasons why things will reverse? Yes, global markets are heavily manipulated, and everyone is saying this time is different b/c of inflation, but as Twain quotes "history doesn't repeat itself but it does rhyme." Last I looked, prices of all commodities like copper, gold, silver, oil, indicate mild to zero inflation. This is what I have so far: 1) Banks releasing more distressed properties into the market 2) Banks easing lending standards for people to buy, and rents start to fall, which pressures Cap Rates, and lowers prices. This view is based on the fact the majority of the recent price appreciation is driven by purchases by investment corporations/REITs, and private buyers. 3) Interest Rates rise in a significant, at least 100bps. Can't predict the future. Maybe a Chairman Yellen would be more hawkish. 4) Foreign buyers exit for several reasons: a) worsening economic conditions in their home countries, b) alternative cities or asset class to invest in, c) or any other geopolitical reason, d) look no further than Japanese buying bubble that burst in early 1990s. [less]