The Economy Is Tanking – Housing Is Next

Thursday, August 20, 2015
By Paul Martin

InvestmentResearchDynamics.com
August 19, 2015

Do not get pimped into buying house now. Wait 6 to 12 months if you really want to take on that expense because you will get a much better price. The housing metrics promoted by Wall Street, industry associations and Bloomberg/Fox Biz/CNBC are just as bad as the Government’s seasonally adjusted, annualized rate pig vomit.

Denver is turning into one big “New Price” sign. Also, I’ve never seen more homes “for rent” in central Denver than now. Ma n Pa investors will take it in the back side on those homes and I bet many of them are stuck flippers or “swing traders.” Unfortunately for everyone, many of the Ma n Pa retail price chasers started using mortgages to make their “investment” purchases. Many of them also checked the “vacation home” box on the mortgage application to get better financing terms. This will not end well.

Inventory now is piling up across the price spectrum more quickly than the brown stuff waiting to hit the fan blades. The upper-end price segment of market has more inventory listed than I can recall seeing 2008. Some small enclaves with psuedo, over-priced mini McMansions have 15-20% of the homes on the market (see Highlands Ranch Golf Club area, for instance).

I wrote an article for Seeking Alpha which explains how some of the “lower profile” housing market metrics are telling a completely different story than the pump and dump headlines on which most of the world reacts:

The bounce in home sales since mid-2010, which has been driven by the Fed’s near zero interest rate policy and $3.6 trillion in QE, has lasted longer than I expected. However, data released recently suggests that the housing market may finally be rolling over. Both mortgage purchase applications and pending home sales declined unexpectedly in July. This data followed a large unexpected drop in new home sales in June (released at the end of July).

The Rest…HERE

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