Article in August 17, 2009 Fortune magazine.  China is pumping money into infrastructure–particularly a high-speed bullet train.

For years, the cost of building materials in US have been impacted by China’s economic growth.  Now they’re doing real economic stimulus–pumping in $585 billion in the next 2 years.  And their projects are truly “shovel ready”.  China will boost its steel production by 10% to 12%.  This means that existing orders for steel and concrete will expand.  By 2020 China’s high-speed rail system will have consumed about 117 million tons of concrete.

So how does infrastructure growth  in China affect you and me here in the center of the US?

Market analysts predict that we will see a housing shortage in as little as 2 years.  They are calling it the Echo Boom.  With an increase in demand for starter homes, new construction will likely get some new life.  This is a good thing.

But with China continuing to suck up raw materials we will likely see increasing costs for new construction.  I think that these trends will be good for existing home sales and the overall health of the real estate market.

Real estate investor, David Lindahl says, “It’s always a good time to buy real estate.”  But you have to know your strategy for it to become a good buy.  If the forcasts are correct, now is a good time to pick up a house at bargain prices and reap good appreciation in coming years.