Bull Case for Real Estate

We are in one of the largest housing/real estate expansions since WWII (the 3rd of 3 so far). Is the bull case for real estate plausible? I see the return of the zero lower bound/QE 4 & increased development regulations as the 2 biggest factors for a bull case in the RE market.

What is the bear case for RE?

 

yes that's true, but considering that we are in phase 4 of the economic cycle, I think that no matter what, real estate will be valuable as a hedge and a directional bet. When we move back into phase one, equities will rise, as well as bonds yields, and the "safe sectors" such as real estate will probably fall in value.

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I think that the Fed needs to get ahead of rate cut expectations to protect against a downturn in the short term. No one is expecting the Fed to get ahead of it, so I think that's why far out of the money put options have jumped in price recently.

I think that the economy is really out of balance because the national debt is so large. I need to read more about large scale debt deflations, but I think that purchasing assets (QE 4) is going to have to happen to shore up liquidity in a downturn, and help to delever the national balance sheet. I worry that without Fiscal Policy initiatives, the Fed is stuck because tax receipts are far too low to deal with the deficit without increasing the inflation target.

 

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