The Entire Housing Market Hit A Wall In August

“I spent well over an hour surveying the housing market in my area (south-metro Denver) and the market is flooded with homes for sale, with many mid-range ($500-$750) homes being lowered 5-10% in price and still sitting on the market.  Zillow is estimating the average home listed in my area is now down 8% from original listing.  This is an area that has been one of the hottest areas of Denver in the last year.  Homes over $1 million are piling up like dogs under a cat stranded in a tree.”  - A colleague of mine who has been looking at the market as a buyer for a year

He sent me a link to the typical home listing he is seeing:   Lowered 4 Times In Last Year

It’s not just confined to Denver:

More evidence:

- All cash sales fall to 6-yr low in June  – that’s your investment buyer/flipper

- NEW home mortgage purchase applications plunge 9% in August - that’s your homebuilder home sales going down the drain, per the HOV/TOL 10-Q disclosures

- Interest rates are moving higher, quickly – that’s cuts off the remaining poor credit, FHA borrowers who borrow money to put down the required 3.5% to get taxpayer subsidized mortgages

- Inventories are climbing, sales are hitting the wall, prices are dropping, foreclosures are going up again.

This is 2005/2006 all over again.   You can ignore reality, but you can’t ignore the consequences of reality.

My latest homebuilder short-sell idea has the potential to return at least $20,000 for every 1,000 shares sold short ($2000 per 100 shares):    Homebuilder Bear Reports

This market is hitting the wall very quickly.