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Regular readers of mine will know there are more than a few problems with today's housing market. But some problems can be very profitable for you...
Millennials are finally entering the housing market and are now the largest percentage of new buyers according to the National Association of Realtors. The problem is that they are arriving just as a shortage develops and prices have made affordability an issue, especially for first-time homebuyers.
One thing we know about housing shortages is that, although it takes some time, eventually builders will deliver houses that meet the demand. Right now, they are making the most money building and selling higher-end homes.
But the builders will eventually move down the price curve to meet the high demand for entry-level and mid-market homes once it's clear they can make more money that way.
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Real estate agents are doing great right now selling high-end homes, and they will be even busier when the more reasonably priced products begin to find their way into the market. Selling a product that is high demand is pretty good for salespeople, and I think the real estate brokerage business could be pretty good for a long time.
Fortunately for us, current uncertainty about the near-term future of housing prices is providing an opportunity to get a cut of a significant percentage of homes sold over the next few years at a bargain price.
With demand outpacing supply, this company is expected to grow earnings by about 20% a year over the next five years.
That's three times better than its overpriced competition too...
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About the Author
Tim Melvin is an unlikely investment expert by any measure. Raised in the "projects" of Baltimore by a single mother, he never attended college and started out as a door-to-door vacuum salesman. But he knew the real money was in the stock market, so he set sights on investing - and by sheer force of determination, he eventually became a financial advisor to millionaires. Today, after 30 years of managing money for some of the wealthiest people in the world, he draws on his experience to help investors find "unreasonably good" bargain stocks, multiply profits, and build their nest eggs. Tim tirelessly works to find overlooked "hidden gems" in the stock market, drawing on the research of legendary investors like Benjamin Graham, Walter Schloss, and Marty Whitman. He has written and lectured extensively on the markets, with work appearing on Benzinga, Real Money, Daily Speculations, and more. He has published several books in the "Little Book of" Investment Series and a "Junior Chamber Course" geared towards young adults that teaches Graham's principles and techniques to a new generation of investors. Today, he serves as the Special Situations Strategist at Money Morning and the editor of Peak Yield Investor.