Davidson and I have what I think is our only quasi-disagreement when it comes the RE. Rather than go through it again, please refer to this previous link.
It is a brief discussion on the topic……
No Minsky Moment As Home Capital Group Teeters: Deutsche Bank
For much of the past decade, Crispin Odey has been waiting for inflation to rear its ugly head. The fund manager has been positioned to take advantage of rising prices in his flagship hedge fund, the Odey European Fund, and has been trying to warn his investors about the risks of inflation through his annual Read More
Lending for new single family units has been well below historical levels. Dodd-Frank has made it difficult for potential new homeowners who would have qualified in past recoveries to get mtgs this recovery period. Yet, housing was still demanded which resulted in a much higher level of apt building. Apt building spiked to ~75% of single family levels in June 2015 and have since come lower but remain historically high.
My guess is we have already seen substantial price rises in housing due in part lack of supply and foreign influx of capital as reflected in strong US$. I do not see much change in the current slower pace of single family starts and continue to avoid this space as well as banks who I do not expect to see an acceleration of mtg lending that traditionally was associated with recoveries.
Real estate in general has been over valued with historical cash on cash returns of 7%-8% now down to 3.5%. Real estate will continue to hold its own even though over valued till the next economic correction.