Why the Demand for Real Estate Licenses May Soon Fall into a Sinkhole
By this measure, the housing boom may be nearing an end
by Bob Stokes
Updated: May 11, 2021
A lot of people who've lost jobs have turned to getting their real estate licenses as a path to prosperity.
Part of the mindset that selling houses is worth a try is the belief that prices go up most of the time.
As the Wall Street Journal noted on March 21:
[S]urging prices are persuading tens of thousands more Americans to try their hands at selling real estate.
There have been many other periods of time when home prices have trended higher. However, that's not always the case. As you know, home prices sank significantly following the subprime mortgage meltdown of nearly a decade-and-a-half ago.
But, after that bear market in real estate bottomed, the number of those getting their real estate licenses climbed to new heights.
Yet, the pace is now slowing.
This chart and commentary from our May Elliott Wave Financial Forecast provide insight:
This chart shows the long rise of licensed [real estate] agents. By this measure, the rise of the great American dream can be traced all the way back to the beginning of the last century. The first two waves into the 1920s and the third wave through the inflationary 1970s were quite robust. In percentage terms, the fifth and final wave of the advance from 1983 is more muted, but the inset shows that in nominal terms, it traces out five waves.
Remember, when a fifth wave is complete, expect a turn in the opposite direction.
The question is: Is the trend in the demand for real estate licenses coinciding with the trend in the price of homes?
You are encouraged to read the May Elliott Wave Financial Forecast for insight into home sales and prices -- plus, get our analysis of stocks.
The stock market is relevant to real estate because financial history shows that stock prices and housing prices tend to be closely correlated.
Follow the link below to gain instant access to our flagship investor package so you can prepare for what may be just ahead.
Have You Heard About the 64-Year Long Bear Market?
In case you haven't, this bear market stretched from 1720 to 1784.
How is that relevant now?
Well, in 1720, at the height of South Sea Company mania, the collective mindset was on ever higher prices, not a historically long bear market.
Some three hundred years later, here in 2021, the collective investor psychology is yet again on ever higher prices.
Now, that doesn't necessarily mean that another 64-year bear market is just ahead.
However, Elliott wave analysis does reveal a major high-confidence warning.
Get the details by following the link below.
In this clip from our Commodity Pro Service, editor Jim Martens highlights a "classic" Elliott-wave setup that can lead to a high-confidence trend change. In Jim's words, "A classic bearish reversal sequence I always mention. I want to see this before I'm confident that the trend has changed." The good news, you can apply this lesson to any market!
Ray Charles. Elvis. James Brown. Chuck Berry. These four pop music icons need no introduction. Music historians have told their individual stories many times. But when we zoom out and look at their careers collectively, we see the indelible influence of social mood on their bouts of triumph and tumult.
Sentiment indicators can help you anticipate huge turns in financial market trends. See exactly what Short Term Update subscribers saw at the start and the end of a two-year move in the Dollar Index.