Property’s Longest, Tallest, Biggest…

Visitors to the Empire State Building often ask an interesting question about the building itself. Does the weight of the building — over 360,000 tons — force Manhattan’s land to sink lower into the water?

Amazing, but this is what they ask.

This same question has been asked before.

In the very early 1800s, a Manhattan carpenter named Lozier came to the startling conclusion that New York was dangerously lopsided. He thought it had too many buildings — taller buildings especially — on its lower end.

If any more went up, he proclaimed loudly, the island would sink into the Hudson River.

To head off this calamity, Lozier suggested to the city’s mayor that a chunk of Manhattan’s northern end be hacked off, towed down the Hudson, and attached to the southern tip. This would redistribute the island’s weight.

It’s true. This is what he said.

Stranger than fiction, government officials were impressed with Lozier’s ingenuity. The New York mayor commissioned him to commence work at once, handing over wads of cash from the City Treasury.

To help with his plan, Lozier advertised for hired help. More than 500 workers showed up, braving the winter cold to wait for the boss…

As you’ve probably guessed, they waited a long time. Lozier simply did not show up.

The workers almost immediately suspected an elaborate hoax. Yet, with typical male pride, hardly anyone would admit to having been tricked.

Lozier hid in Brooklyn and did not return for months.

Some 200 years later, Manhattan has not sunk into the ocean, and the real estate cycle continues to turn. This is happening right before your eyes. It’s a crucial cycle to understand not just for property markets, but for stock markets as well.

Over at Cycles, Trends and Forecasts, we’ve analysed hundreds of years of data to track this cycle. And a simple way of understanding where we are within the cycle is with our property clock.

If you haven’t seen it, here’s what it looks like:

Source: Cycles, Trends and Forecasts

Click to enlarge

Events within the real estate cycle do not happen in a vacuum.

There are very good reasons why it turns as it does — very good scientific reasons. And there are myriad ways to help you determine where we are in the cycle.

Since 1837, the US has always ended up with the longest, tallest or biggest ‘something’ as we go into the peak of the cycle. And, since 1800, it’s always been 14 or so years from the prior land-price-led collapse.

Tall buildings may not sink cities into the sea, but they do play their part in the cycle. And you can use this knowledge to your advantage. It tells you where you are in the current real estate cycle.

And that tallest ‘something’ — usually a building of some sort — will stand out. In fact, it will flash at you — clearly — the ‘real estate cycle peak’ is ahead.

Here is the latest possibility: The Big Bend in New York. This building is set to be the ‘longest’ in the world.

It’s a building that curves to fit into two small plots. Here, see for yourself:

Source: BBC NewsBeat

Click to enlarge

Would you fancy living there?

You’d be living in a grid of large windows. It will have ‘legs’ that straddle a historic building to fit into narrow plots either side. And elevators that move up, down and sideways.

At 1,200 metres (4,000 feet), the design is a thin structure that curves and then returns to the ground.

This is the sort of thing you can look for at the next peak.

It may not get built. But expect to see something like it as we go into the next peak. This is indeed what will help you gauge the extreme itself.

At Cycles, Trends and Forecasts, we teach our readers not to confuse the extreme cycle peak with the mid-cycle slowdown. The mid-cycle slowdown is due soon. (We expect a stock market peak in late 2019 to lead us into it.)

You will also see a lot of ‘tall’ buildings open up around this time too, in 2019. And other things that are the ‘biggest’, ‘longest’ or ‘tallest’ of their kind.

For example, Google recently bought some land in Reno, Nevada. It will build a massive new data centre for its cloud computing service. The Google building is just a couple of miles south from the area where Tesla is building its very own battery factory — for US$5 billion.

The new Tesla building could become the world’s biggest building. It’s due for completion in a couple of years, according to the company.

You can use these completions to help judge the position of the real estate cycle for yourself.

The fact that so many tall buildings are due to be completed soon tells you that this cycle is on target to dwarf all others. As each cycle has dwarfed the one before it.

To time it all to your advantage, go here.

Best wishes,

Phil Anderson,
Editor, Cycles, Trends & Forecasts

PS: Some newsletter writers at Port Phillip Publishing believe a great crash is coming. And that many nations are going to collapse under the weight of too much debt.

As you’ll see in this video tutorial, I believe they are dead wrong. The current stage of the Grand Cycle is this:

We are roughly six-and-a-half years into the current cycle. When it comes to the stock market, you can be confident in buying dips and ‘panics’ until well into the end of next year.

Between now and then, markets will recover after each ‘dip’. As they have done since March 2009.

But what happens in 2018? When will Australia finally enter recession?

And when will the next major panic (and I mean major) occur?

It’s all been foretold… Watch this.

Phillip J Anderson is an Australian academic, author and student of stock, commodity and real estate cycles. Drawing on the work of British economist Fred Harrison and American technical analyst WD Gann, Phil developed his own theory about 18-year real estate cycles in the early 1990s. Since then, Phil has been using cycle theory to guide his own investment decisions — crediting the phenomenon with his decision to move to a 100% cash position in July of 2007, just before the GFC wreaked havoc on the Australian stock market. He has also built up a lucrative property portfolio here and in the UK. Phil is currently predicting a 14-year boom in Australian house prices; an idea he expands on more in a brand new Fat Tail Investment Research film, ‘Remembering the Future’.

Money Morning Australia