HOUSING MARKET

It's just depressing looking at the new housing stats...




But, I may be the only one as investors have been accumulating the homebuilders shares optimistically since March 2009. Are they seeing recovery in 2010 or is this just a "blind fury"?

Housing can not recover before jobs recover. With 17-18% real unemployment people can't rush into buying a house cuz they don't know where they will find the next job and if they have a job, they are afraid they might be next to let go. However housing stocks can recover several months before housing itself.

Edited by pdx5, 17 January 2010 - 06:23 PM.

I can tell you, it's a good policy to stop digging when one is in a hole. When the housing market is over done, it pays to stop building more supply! I'm guessing that the home builders are discounting consolidation and profitability for the survivors. They are, I think, premature, but they have the right idea. Just at the wrong time.

What's going on?

Lumber: the newest bubblemania. Thanks, Canada!

http://shockedinvest...osive-move.html

As an aside, China apparently can't grow trees (or much else) since deforesting and decimating their terrain during and since the late Neolithic period, all in the name of producing vast quantities of ceramic objects. Kind of a recurring theme there.

Here is the problem - 1) Of those who actually have a JOB: 75,000,000 U.S. households (66 percent of all households) live on $75,000 a year or less. 54,000,000 live on $50,000 or less a year (47 percent of all households). This is where the average American is financially in today’s economy. And most of this money comes from a job that pays a weekly or monthly paycheck and not some dividend check from a trust fund. 2) Apartment vacancies: Apartment pricing is seeing pressure to the downside because of massive vacancies: 11.1% rental vacancies -This is the highest rate on record and tells us that we have over built and the market is still unable to sop up the excess properties. So what will happen is competition for cheap housing by lowering rents. This is the only way to drive demand in a market where average Americans are becoming more price conscious every day. And with rents comign down, it makes less and less sense for peopel to own right now, especially if they can't even get together a down payment or have a totally wrecked credit history. Its stunning to see with all the people who have been put out of their homes, that apartment vacancies are still rising. Where are all these people living or going ? 3) Foreclosures: It’s hard to picture 2.8 million homes. Thats all of the homes in the states of Illinois and MD. Thats how many homes were lost to foreclosure in 2009. There were 3.9 million foreclosure filings last year, RealtyTrac reports today, 2.8 million of which resulted in foreclosure. That’s a record dating back to at least 2005 — when RealtyTrac started keeping track. Worse yet, RealtyTrac is forescasting another 3 million foreclosures in 2010. Makes sense – home prices are still way, way below what most people paid from 2003 to today. Huge numbers of people are now upside down. Option arm resets are multiplying like rabbits. And 17-20% of the population is out of work… not the seeds of which a housing recovery is sewn. 4) Homes held off the markets by banks - and this is an impossible number to identify. Maybe another 2 million. Some say its ONLY 1 million. Has to be a lie when you look at foreclosure filings, and the fact we have 17% of population or more unemployed. 5) I'd have to guess total inventory is more than 6 million units, that sits unsold, and unoccupied. I've heard people say around 3.8 million existing homes sit unsold, or 8 month supply. That has to be a highly manipulated number at best. and yet the stokc market keeps on a truckin higher and higher....

Funny, there is something on the tube right now about Easter Island. They chopped down all the trees and ended up eating eachother.

I can tell you, it's a good policy to stop digging when one is in a hole

And, that just about sums it up brilliantly...