The Housing Sector Is Starting To Crash

Investment Research Dynamics

The homebuilders are rolling over here.  This is daily 1-yr graph of the stock in my latest homebuilder short-sell report posted last night (click to enlarge):

Despite the S&P ramping relentlessly higher by the Fed’s hand of intervention, the homebuilder stocks have exhausted themselves, as they are choking on quickly deteriorating fundamentals.   This stock has already dropped 6% from its highest close last week, despite the fact that both the S&P 500 and the Dow are higher now than they were last week when this stock topped out.  My 3-month short term target is for another 16% decline.  My 2-year tarket:  $5 or lower, with bankruptcy possible.   This Company has 4x more debt NOW relative to the number of homes it sells than it had at the peak of the housing bubble.  In fact OUTRIGHT, it’s debt level is higher than the amount of debt it had in 2005.  You can access this report here:   Short This Stock For Big Gains.

Here’s some actual “boots on the ground” market information from around the country which verifies that the housing market is starting to deteriorate very quickly (I sourced these first three quotes from The Housing Bubble Blog):

From the Washington Post:  Only four cities or counties in the Washington region have fully rebuilt their property tax bases since the 2008 recession, a study from George Mason University’s Center for Regional Analysis says, raising questions about the wisdom of tying local government operating budgets to the real estate market. Property values have stagnated in most suburbs since 2005, said David Versel, the senior research associate who wrote the report.

From the Houston Chronicle (note:  the collapse in the price of oil and the shale oil/fracking business will decimate Texas, Colorado, sections of California):   For the first time in awhile, real estate observers say some apartments are waiving first month rents and offering other specials to attract new tenants.  (On another note, I have noticed that there is a massive surge in apartment supply hitting the Denver market and big apartment buildings are now offering move-in incentives;  I’m also seeing a surge homes for rent around the central Denver area).

From CNBC re: northern Virginia:   A big jump in listings brought more potential buyers out to northern Virginia’s housing market this summer and fall. The traffic, however, did not translate into a similar jump in sales, and homes are now sitting on the market far longer than they did just one year ago.

Now, despite today’s Government fairy tale about the job market, here’s the reason that the housing market is going to collapse again:   A Majority of Americans Make Less Than $20 Per Hour.  A recent poll conducted by Trulia showed that nearly 60% of all prospective first-time homebuyers cited the inability to save enough for a down payment as the reason they could not buy a home.   Interest rates could go to ZERO and that would still be the case.

The Government, the National Association of Realtors, the National Association of Homebuilders and the Census Bureau can feed us all the made up, statistically manipulated, annualized garbage data they want.  BUT they can’t cover up the truth about the actual market conditions unless they shut off the media and close down the internet.