America’s property market is headed for a catastrophic crash, according to one financial expert who’s sounding the alarm on an impending real estate apocalypse.
Chris Vermeulen, founder of The Technical Traders, has issued a stark warning about the future of the United States property market.
Vermeulen believes both residential and commercial properties are on the verge of a steep price drop that could see values sink by a whopping 30 percent in just three years.
‘People are going to have to start to sell their homes,’ Vermeulen told Business Insider this week. ‘What we’re starting to see is people starting to realize they can’t afford their mortgages, or they need to downgrade.
‘A lot of people are struggling financially, and this is really the tip of the iceberg. Give it another two or three years — that’s when the real-estate market gets hit the most.’
The warning comes as Americans are already showing signs of financial strain.
Retail sales have been unexpectedly weak for the past two months, for example, rising just 0.1 percent in May.
Vermeulen said this could trigger a domino effect of corporate profit losses, leading to more layoffs and reduced hours for workers.
‘People are starting to get laid off as unemployment rises. People have burned through their savings, and inflation is crazy higher,’ he said. ‘Eventually, people aren’t going to be able to pay their mortgages.’
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Job cuts have already skyrocketed 136 percent in January, according to consultancy Challenger, Gray & Christmas.
The expert predicts unemployment could Soar to a shocking 5 percent to 6 percent, leaving many Americans unable to keep up with their mortgage payments.
But it’s not just homeowners who should be worried.
The commercial real estate sector is facing a staggering $900 billion debt crisis with foreclosures already up 117 percent in March.
Vermeulen also sees property prices nosediving by about 30 percent across both residential and commercial markets.
He warns it could take a decade for a recovery.
‘The price of real estate has doubled or tripled in the last couple of years. It’s pretty wild. And usually, when an asset goes up that much that quickly, it usually comes back and pulls and corrects,’ said Vermeulen.
‘It’s going to be an incredible opportunity for people who can identify the bottom.’
Vermeulen’s forecast stands out as one of the bleakest among recent real estate commentators, however, not everyone shares this negative vision.
The National Association of Realtors has maintained that low housing inventory could keep prices stable in the coming years.