Michael Burry, the investor who famously predicted the 2008 financial crisis in "The Big Short," is back with another ominous market warning. This time, he's pointing to something that sounds almost too simple to matter: Americans now hold more wealth in stocks than in real estate. But according to Burry, this shift is anything but ordinary.
A Signal From the Archives
On Wednesday, Burry took to X to share a chart labeled "Exhibit 12" from Wells Fargo Securities and Bloomberg. The data tracks how U.S. households divide their wealth between equities and real estate as percentages of total net worth. The chart shows equity wealth has climbed substantially and recently crossed above real estate wealth—a development Burry believes is a high-conviction warning sign.
What makes this noteworthy? It's exceptionally rare. Burry emphasized that household stock wealth exceeding real estate wealth has happened only twice in modern history: the late 1960s and the late 1990s. And here's the uncomfortable part—both times were followed by extended bear markets.
History's Uncomfortable Pattern
The pattern Burry identifies isn't encouraging. When stocks overtook real estate in the late 1960s, a decade of stagflation and dismal real returns followed. The late 1990s crossover marked the peak of the Dot-Com bubble, which subsequently imploded spectacularly.
"The last two times," Burry wrote in his post, "the ensuing bear market lasted years." He signed off with the playful nickname "Beary Burry," though the message itself was anything but lighthearted. The now de-registered Scion Asset Management founder is essentially arguing that we're witnessing a historic wealth allocation imbalance that tends to correct itself painfully.
Meanwhile, Markets Keep Climbing
Burry's warning arrives as major indices continue their impressive 2025 run. The S&P 500 has advanced 15.88% year-to-date, while the Dow Jones has returned 13.50% and the Nasdaq Composite has surged 19.87% over the same period.
On Tuesday, the SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust ETF (QQQ), which track the S&P 500 and Nasdaq 100 indices respectively, closed mixed. SPY slipped 0.27% to $678.87, while QQQ gained 0.20% to $611.75. Futures for the S&P 500, Nasdaq 100, and Dow Jones indices were trading lower on Wednesday.
Whether Burry's historical analysis proves prescient again remains to be seen, but his track record certainly commands attention.