While the real estate market in the U.S. may slow down over the next 5 to 10 years, a correction from current valuations across the board is not imminent, said Briton Hill, president of Weber Global Management.
The health of the market varies by location, Hill told David Lin, anchor for Kitco News.
“Depending on where you’re at, you [could be] in the clear but there are other areas like New York City where there’s a big exodus of people from New York…New York prices are softening, so the first thing I would take into consideration is where are you,” he said.
Hill added that the potential for rising interest rates doesn’t pose as much of a risk anymore than in 2007, since not all households borrow with variable interest rates.
“I don’t think that’s so much of a risk anymore. What we do have more people using higher amounts of leverage with lower yields so I think the risk comes when the interest rates rise, it’s not necessarily going to affect fixed mortgage payments but asset prices fall elsewhere, and especially if people use those assets as collateral, they’re going to start getting calls on that collateral,” he said.
Selling of assets is going to start a vicious cycle of selling across the market, he said.
For Hill’s rationale for gold to climb to $20,000 an ounce, watch the video above. Follow David Lin on Twitter: @davidlin_TV (https://twitter.com/davidlin_TV).
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