I studied this in detail in 2005 when selling my previous home, and found nothing tangible that an investing system could be constructed from. However, they are the two major places to invest, so it seems logical to me that they are somehow linked. If we factor in the typical mid term congressional election bullish bias in stocks, which is two years, that means the rally should carry into the end of next year. The next possible cycle low I see for RE is 2008, so it could be at that time that we see another swing down in stocks and up in RE as money shifts.
These are broad cycles, this is not contradicting the short term top I am forecasting for stocks at the end of this summer. I think that decline will setup up a nice buy spot this fall, for another stock rally, which could be very powerful, then maybe it gives way to a shift back to RE in late 2008. This is my tentative forecast on this. How far prices fall in RE or stock prices rise in the interim is anyone’s guess. I see no need to flee the US from an investment standpoint.
