"Real Estate investment cycle is very long, 6 to 10 years, and very predictable. You are 25. There are plenty of time to catch a few cycles."
I was not going to downvote because of disagreement. It sounded like shilling with no reason to back it up.
I have no idea what you mean by predictable or how you have a timeline. You mentioned housing starts so I will assume you were specifically speaking to residential real estate. It sounds simple to say look at rent to income or housing starts for an indication of housing price trends but really if you dont know what you are doing dont bother.
You mentioned interest rates for example. You do realize that a conforming home loan is sub 4.5% right? Well, you might not know that for most parts of the country (prices behave differently in land constrained regions and or low population density) the biggest factor in predicting nominal home prices changes is the interest rate on a home loan. Home value and interest rates are inversely correlated just like most asset classes but a little more so since we have a social obligation to make it easier to own a home. Anyways, my point was if you think we are japan and will have 15+ years of low interest rates that might be ok to neutral for home prices. Keep in mind japanese housing prices countrywide have been falling since 1991. If interest rates happen to move upward anytime soon housing prices will be crushed. We have no room for interest rates to go downwards anymore. Also we have a ginormous shadow housing inventory that is being held by banks who have tattered balance sheets. There are a lot of homes that should be going through the foreclosure pipeline that are being held because a flooding of the market with empty homes would destroy the value of the mortgage obligations that are being held. Someday these will be sold however. It wont be pretty for the housing market or for the owners of the whole loans.
Ramblings. But my point was that nobody really has any idea whats going to happen in the future. The government has a plan of its own with its own agenda. The banks and servicers all are trying not to get crushed under an avalanche of bad assets and are hoping they can earn/appreciate their way out of it. Maybe underwater home owners in non-recourse states will wise up and walk away. There is some hoopla in the industry about the lack of ability to foreclose due to crappy title transfers (exchange of ownership of debt from one play to another) and this could effect the ability to lend since people are already nervous about unknown consequences for lending in this political environment. Houses are nice. You can live in them (and for a primary res I dont think pricing should really matter over 30 years although the math to be sure is somewhat complex). But nobody really has any idea where prices are going or to what magnitude. But maybe you know something I don't.
Oh, fyi there are case-shiller options and futures available on the CME. It avoids a lot of the bothersome carrying costs of actual ownership.