Wave Bye-Bye To The Housing Market

“[Foreclosure activity] is reason to wake up and realize the housing recovery we’ve seen over the past two years is not as strong as it might have seemed.”  Daren Blomquist, RealtyTrac

Beginning in the Fourth quarter of fiscal 2013, we have experienced a leveling in demand that continued through the second quarter of fiscal 2014 and has more recently become a weakening in demand.   –  Major homebuilder CEO

The housing market is collapsing.  The big investors have stepped away and, now, flippers done:  All-Cash Sales Fall to Six-Year Low.   The demand-side of the market is in collapse.

The homebuilder stocks represent the best short-sell opportunity I have seen in any stock market sector since the peak of the tech bubble in 2000.   The homebuilders are trading at insanely overvalued levels, with  p/e ratios several multiples higher than the p/e ratios these stocks had at the top of the housing bubble in 2005/2006.

When the S&P 500 starts to really sell off, it will exert particularly brutal downside force on the homebuilder stocks.  At the very least, institutional/professional money managers have a fiduciary to re-examine their assumptions behind their homebuilder stock position.

I have three lay-up short-sell ideas here, all of the embedded with accounting fraud:  Homebuilder Research Reports.