Gregor Macdonald submits: Of the many asset classes to be victimized by the end of cheap energy, residential real estate is perhaps the most vulnerable. A call option on future wage growth, and, leveraged to our liquid-fuel based transport system, housing in North America is currently making its way back to the stable, but barely appreciating asset it once was. However, having started this journey only recently there is still a long way to go. A long way in price that is, for housing to fall.
The housing crash is currently in the midst of its next leg down. In similar fashion to those who missed the initial crash, the past year has seen a number of observers calling for a bottom. One of my favorite calls came last year from Karl Case in an editorial in the Wall Street Journal. In A Dream House for All, Mr. Case made the following argument:
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