Thursday, December 30, 2010

Housing -- Been down so long, it looks like up to me

The home market appears to be taking another leg down after the tax rebate induced spike earlier this year.

More details on home prices can be found here:
Paper-economy tracks (2nd link) the Radar Logic index which appears to lead the more well known Case/Shiller index.

Unfortunately if home prices fall further this may set up a feedback loop as more households with negative equity decided to strategically default.  Furthermore the recent rise in long term interest rates will not help affordability either

Housing permits are falling again and coming very close to putting in an all time low for the time series (The all time low was hit just a few months ago)  Looking at the graph you will also notice how in previous recoveries housing permits quickly rebounded.  Not this time.  Considering home values are falling this puts pressure on new home construction.  Lumber prices are also going up.

Eventually home prices will fall enough for demand and supply to finally balance but it doesn't look like we are there yet. For now the downward trend appears it will continue.

Disclosure: Short housing related stocks


  1. will fall even farther w/BoA n others starting up forclosures again.


  2. Excess supply is a bitch when there's no demand. The market will eventually recover. Calculared risk is calling for second half 2011. Place your bets!

  3. Typo. thats:

  4. maybe turn corner in '12 with longggg slow slog back to normal(nothing like '05 ever) by '16.

    and since banks were not "1990 swedish-ized" another recession approx. '17

    my brother is no-bid cost-plus mid n high end builder here in n. fla.---first time in 35 yrs nothing to build.......just finished tom coughlin's house here.....tom is a first-class human being by the way.

  5. Wow. Please let us know when he starts to get work again.

  6. well he does have one coming up soon....but here in the land of The Players Championship its slow....and for alot this is prime retirement area--florida with a winter that looks like early fall to most yankees.....Mayo clinic dowen the street(tho i wouldn't go there for many reasons.)

    the boat business(my old occupation) is the REAL disaster story......course its always the LAST dollar spent....most can talk the women-what-be-in-charge into pools n motorhomes n even airplanes before a boat.

    and if mamma ain't happy no one is.

    and it doesn't help the idiots running this country right now have outlawed bottom fishing from NC to cape kennedy....they have virtually made up their own fish numbers to defend it.

    fish are our friends, not food!...they say....huh?