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December 29, 2017 | Eight (8) Cities where Real Estate Prices (Values) drop in 2018!

Donald B. Swenson: Born January 24, 1943, Roseau, Minnesota. Graduated H.S. 1961, Moorhead High, Minnesota. Graduated College 1968, Moorhead State University, Minnesota. Designated member of Appraisal Institute (MAI), 1974. Employed with Western Life Insurance Company, 1968 – 71; Iowa Securities Company, 1971 – 73; American Appraisal Company, 1974 – 81. Part-time teacher/valuation consultant/bartender, 1979 – 2008 (taught workshops at Waukesha County Technical Institute, Wi. and Madison Area Technical College, Wi.). Retired 2008 (part time teacher/blogger), AZ. Self educated economist/philosopher/theologian: http://kingdomecon.wordpress.com.

The huge bubbles in real estate will get pricked in 2018 as demand drops, affordability limits buyers, interest rates increase, and supply wanes. The trend is obvious, to me, who has followed these markets for some 50 years. As an MAI valuation expert, I follow this concept called ‘value’ as it is core to all trends within our economy and within finance. Real estate ‘values’ will drop in the following eight cities (and this will be typical of major cities all around the planet):

  1. Vancouver, B.C. (we could witness a 50% drop in values by end of 2018)
  2. Toronto, Canada (we could witness a 50% drop in values by end of 2018)
  3. San Francisco, Ca. (50% drop by end of 2018)
  4. Los Angeles, Ca. (25%+ drop by end of 2018)
  5. San Diego, Ca. (25%+ drop by end of 2018)
  6. Stockholm, Sweden (25%+ drop by end of 2018)
  7. Oslo, Norway (25%+ drop by end of 2018)
  8. London, England (25%+ drop by end of 2018)

It is unnecessary to name additional cities because the above represents what will be typical all over the globe IMO. We live in a global village where Central Bank policies control what happens within real estate. As I write, our Central Banks in America, Europe, Latin America, and soon Asia will gradually ‘tighten’ monetary policy via their interest rate tool. This tool will be gradual but relentless and it WILL prick this Bubble in real estate (within the year 2018).

 

This real estate bubble is now so obvious that most astute real estate pundits are catching on to the above info. Could our Central Banks change course and allow the bubble to continue. This is possible but very unlikely. Central Banks are now a global network of digital entities (interconnected) which coordinate their thinking globally. The word (from their leaders) seems to be that a ‘tightening’ must occur and this is deathly for ‘values’ and ‘affordability’.

 

Cap Rates increase automatically as interest rates increase. As Cap Rates increase ‘values’ decrease. It is all ‘math’. I played this game for years while valuing commercial properties for various lenders in the U.S.A. Cap Rates could double by the end of 2018 and this means that ‘values’ decline by 50%. House prices are mostly affected by this concept called ‘affordability’. As interest rates increase ‘affordability’ is restricted to large numbers of buyers. It all happens subtly but relentlessly as Central Banks control all our markets.

 

Today, we live in a global digital economy where Central Banks rule over all finance and all asset valuations. Private demand is controlled by a few elites who rule over finance (usually behind closed doors). Our markets are all ‘math’ dependent as our money is a ‘digit’ (number) within the computer screen. Virtual reality rules over finance today. Math rules over valuations/prices. I played this game for years and the change in trend is obvious to me. Think back to 2007 (the changes which occurred then) and then back to the 1980’s re: the Savings and Loan Crisis.

 

Get ready for huge changes later in 2018. The gradual nature of change may allow many markets to avoid huge value declines early into 2018. But as the ‘tightening’ continues over months, the end result is predictable. Central Bank policies are at the core of our change and today only a few elites control the entire global market. We live with a corrupted financial system which few comprehend. Watch what the Central Banks do and then follow the money as if flows from market to market.

 

I leave for Vancouver later in January and will do some further research on this real estate market in B.C. The general market in Vancouver reveals that average house prices are over $1 million as of today. These prices will likely be $500,000 (a 50% decline) by the end of 2018. I see the same result for Toronto and San Francisco. One website which I follow which seems to understand this phenomena within real estate is as follows: https://youtu.be/2YBtoH4Ez9k

 

All the hype around the Trump tax bill which becomes effective in a few days also reveals that real estate was not favored in this bill. This will help to accelerate this trend of declining ‘values’ starting in 2018. As real estate goes…so goes the general economy. We may not FEEL the effect of all this for a few months. I sense the trend in my consciousness (now) but others may start to sense this reality in a few weeks or months. ‘Value’ is the core concept within finance and real estate.

 

As this concept called ‘value’ changes our markets, the general economy gets directly affected and our stock markets will also get affected. We will likely see a crash in these stock indices some time in 2018. The entire digital/cyber/virtual finance system is now all interconnected and global. Central Banks RULE over our computer driven markets. Watch what happens within America’s Federal Reserve System as new members seek to change policies and trends in 2018. Follow the digital money! Enjoy! I am: https://kingdomecon.wordpress.com.

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December 29th, 2017

Posted In: Kingdom Economics

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