After identifying a trend, my next step is to look for confirmation with the big-money players. Are hedge funds and other institutional money backing this trend with their bullish bets? I have found that when the big money confirms the start of a macro trend, then there is explosive profit potential if I follow along.
And one of the most powerful macro trends of 2013 is well underway.
And this is not just theory. The numbers are proving this trend is already in progress. For example, research firm Zelman & Associates has reported a 67% increase in single-family home rentals in Florida, Arizona and Nevada between 2005 and 2011. This includes a corresponding homeownership rate decrease to about 50% in Nevada. While these numbers are extreme, they reflect what is happening across our nation to differing degrees.
As the United States begins the shift into a "Renter Nation," home prices are rapidly rising in many regions of the country. San Francisco and Phoenix have seen home prices jump 22% from their lows, Las Vegas is up 11% and many cities in Florida has seen gains of 8% to 10% during the past several years. Overall, U.S. housing prices have climbed more than 5% since the bottom in October 2011.
These rising prices, although fantastic for existing homeowners who were able to weather the financial crisis, act as a deterrent to aspiring homeowners as prices spiral out of their economic grasp. This is what's fuelling the changeover to a "Renter Nation." (more)
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